Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Mar. 08, 2019 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | Aquestive Therapeutics, Inc. | |
Entity Central Index Key | 0001398733 | |
Current Fiscal Year End Date | --12-31 | |
Entity Well-known Seasoned Issuer | No | |
Entity Voluntary Filers | No | |
Entity Current Reporting Status | Yes | |
Entity Shell Company | false | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Public Float | $ 101 | |
Entity Common Stock, Shares Outstanding | 24,975,007 | |
Document Type | 10-K | |
Amendment Flag | false | |
Document Period End Date | Dec. 31, 2018 | |
Document Fiscal Year Focus | 2018 | |
Document Fiscal Period Focus | FY |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 60,599 | $ 17,379 |
Trade and other receivables, net | 6,481 | 6,179 |
Inventories | 5,441 | 4,014 |
Prepaid expenses and other current assets | 1,680 | 591 |
Total current assets | 74,201 | 28,163 |
Property and equipment, net | 12,207 | 13,460 |
Intangible assets, net | 204 | 254 |
Other assets | 239 | 1,239 |
Total assets | 86,851 | 43,116 |
Current liabilities: | ||
Accounts payable | 20,436 | 9,601 |
Accrued expenses | 7,195 | 4,402 |
Deferred revenue | 721 | 1,347 |
Loans payable, current | 4,600 | 0 |
Total current liabilities | 32,952 | 15,350 |
Loans payable, net | 42,603 | 45,507 |
Warrant liability | 0 | 7,673 |
Asset retirement obligations | 1,216 | 1,081 |
Total liabilities | 76,771 | 69,611 |
Commitments and Contingencies | ||
Shareholders/members equity/(deficit): | ||
Common interests, no par value. Authorized 500,000,000 units; 121,228,353 units issued and outstanding at December 31, 2017 | 0 | 12,727 |
Common stock, $.001 par value. Authorized 250,000,000 shares; 24,957,309 shares issued and outstanding at December 31, 2018 | 25 | 0 |
Additional paid-in capital | 71,431 | 0 |
Accumulated deficit | (61,376) | (120,093) |
Total shareholders equity/members (deficit) | 10,080 | (68,596) |
Total liabilities and shareholders equity/ members deficit | 86,851 | 43,116 |
Series A-3 Preferred Stock [Member] | ||
Current liabilities: | ||
Redeemable preferred interests and accrued dividends | 0 | 5,896 |
Series A-2 Preferred Stock [Member] | ||
Current liabilities: | ||
Redeemable preferred interests and accrued dividends | 0 | 36,205 |
Series A Preferred Stock [Member] | ||
Shareholders/members equity/(deficit): | ||
Preferred interests | 0 | 16,887 |
Total shareholders equity/members (deficit) | 0 | 16,887 |
Series A-1 Preferred Stock [Member] | ||
Shareholders/members equity/(deficit): | ||
Preferred interests | 0 | 21,883 |
Total shareholders equity/members (deficit) | $ 0 | $ 21,883 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) | Dec. 31, 2017$ / sharesshares |
Shareholders/members equity/(deficit): | |
Common interests, par value (in dollars per share) | $ / shares | $ 0 |
Common interests, units authorized (in shares) | 500,000,000 |
Common interests, units issued (in shares) | 121,228,353 |
Common interests, units outstanding (in shares) | 121,228,353 |
Series A Preferred Stock [Member] | |
Shareholders/members equity/(deficit): | |
Preferred interests, par value (in dollars per share) | $ / shares | $ 0 |
Preferred interests, units authorized (in shares) | 100,000,000 |
Preferred interests, units issued (in shares) | 16,886,750 |
Preferred interests, units outstanding (in shares) | 16,886,750 |
Series A-1 Preferred Stock [Member] | |
Shareholders/members equity/(deficit): | |
Preferred interests, par value (in dollars per share) | $ / shares | $ 0 |
Preferred interests, units authorized (in shares) | 100,000,000 |
Preferred interests, units issued (in shares) | 21,526,850 |
Preferred interests, units outstanding (in shares) | 21,526,850 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Loss - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Consolidated Statements of Operations and Comprehensive Loss [Abstract] | ||
Revenues | $ 67,430 | $ 66,918 |
Cost and expenses: | ||
Manufacture and supply | 20,988 | 19,820 |
Research and development | 23,112 | 22,133 |
Selling, general and administrative | 72,264 | 25,078 |
Total costs and expenses | 116,364 | 67,031 |
Loss from operations | (48,934) | (113) |
Other income (expenses): | ||
Interest expense | (7,711) | (7,707) |
Interest income | 552 | 0 |
Change in fair value of warrant | (5,278) | (1,123) |
Other expense | (5) | 0 |
Net loss before income taxes | (61,376) | (8,943) |
Income taxes | 0 | 0 |
Net loss | (61,376) | (8,943) |
Dividends on redeemable preferred interests | 0 | (2,480) |
Net loss attributable to common shares/ members' interests | (61,376) | (11,423) |
Comprehensive loss | $ (61,376) | $ (11,423) |
Net loss per share - basic and diluted (in dollars per share) | $ (2.96) | |
Weighted-average number of common shares outstanding - basic and diluted (in shares) | 20,725,526 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Shareholders' Equity/Members' Deficit - USD ($) $ in Thousands | Common Stock [Member] | Additional Paid-in Capital [Member] | Accumulated Deficit [Member] | Total | Preferred A Interests Units [Member] | Preferred A-1 Interests Units [Member] | Common Interests [Member] |
Balance at Dec. 31, 2016 | $ 0 | $ 1,460 | $ (108,670) | $ (57,197) | $ 16,887 | $ 21,883 | $ 11,243 |
Balance (in shares) at Dec. 31, 2016 | 0 | 16,886,750 | 21,526,850 | 118,785,104 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Dividends on preferred interests | $ 0 | 0 | (2,480) | (2,480) | $ 0 | $ 0 | $ 0 |
Issuance of common interests upon exercise of warrants | $ 0 | (1,460) | 0 | 24 | $ 0 | $ 0 | $ 1,484 |
Issuance of common interests upon exercise of warrants (in shares) | 0 | 0 | 0 | 2,443,249 | |||
Net loss | $ 0 | 0 | (8,943) | (8,943) | $ 0 | $ 0 | $ 0 |
Balance at Dec. 31, 2017 | $ 0 | 0 | (120,093) | (68,596) | $ 16,887 | $ 21,883 | $ 12,727 |
Balance (in shares) at Dec. 31, 2017 | 0 | 16,886,750 | 21,526,850 | 121,228,353 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Reorganization to C-Corporation | $ 0 | (26,495) | 120,093 | 42,101 | $ (16,887) | $ (21,883) | $ (12,727) |
Reorganization to C-Corporation (in shares) | 5,000 | (16,886,750) | (21,526,850) | (121,228,353) | |||
Effect of Stock Split | $ 15 | (15) | 0 | 0 | $ 0 | $ 0 | $ 0 |
Effect of Stock Split (in shares) | 15,072,647 | 0 | 0 | 0 | |||
Common Stock issued to performance unit plan participants | $ 5 | 19,118 | 0 | 19,123 | $ 0 | $ 0 | $ 0 |
Common Stock issued to performance unit plan participants (in shares) | 4,922,353 | 0 | 0 | 0 | |||
Reclassification of warrant liability to equity | $ 0 | 12,952 | 0 | 12,952 | $ 0 | $ 0 | $ 0 |
Cash received for warrant exercise | 0 | 116 | 0 | 116 | 0 | 0 | 0 |
Common Stock issued related to initial public offering | $ 5 | 68,709 | 0 | 68,714 | $ 0 | $ 0 | $ 0 |
Common Stock issued related to initial public offering (in shares) | 4,925,727 | 0 | 0 | 0 | |||
Issuance costs related to initial public offering | $ 0 | (5,232) | 0 | (5,232) | $ 0 | $ 0 | $ 0 |
Issuance costs related to initial public offering (in shares) | 0 | 0 | 0 | 0 | |||
Share-based compensation | $ 0 | 2,278 | 0 | 2,278 | $ 0 | $ 0 | $ 0 |
Share-based compensation (in shares) | 31,582 | ||||||
Net loss | $ 0 | 0 | (61,376) | (61,376) | 0 | 0 | 0 |
Balance at Dec. 31, 2018 | $ 25 | $ 71,431 | $ (61,376) | $ 10,080 | $ 0 | $ 0 | $ 0 |
Balance (in shares) at Dec. 31, 2018 | 24,957,309 | 0 | 0 | 0 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Cash flows from operating activities: | ||
Net loss | $ (61,376) | $ (8,943) |
Adjustments to reconcile net loss to net cash (used for) provided by operating activities: | ||
Depreciation and amortization | 3,186 | 3,750 |
Change in fair value of warrant | 5,278 | 1,123 |
Share-based compensation | 29,940 | 0 |
Asset retirement obligation accretion | 130 | 122 |
Amortization of intangible | 50 | 51 |
Amortization of debt issuance costs and discounts | 1,696 | 1,860 |
Non-cash interest expense | 0 | 33 |
Bad debt provision | 3 | |
Bad debt (recovery) | 0 | (53) |
Other, net | 104 | 0 |
Changes in operating assets and liabilities: | ||
Trade receivables and other receivables | (409) | 4,691 |
Inventories, net | (1,427) | (1,128) |
Prepaid expenses and other current assets | (1,140) | (171) |
Accounts payable | 11,319 | 2,943 |
Accrued expenses | 281 | 1,001 |
Deferred revenue | (626) | 545 |
Net cash (used for) provided by operating activities | (12,991) | 5,824 |
Cash flows from investing activities: | ||
Capital expenditures | (1,824) | (2,068) |
Net cash (used for) investing activities | (1,824) | (2,068) |
Cash flows from financing activities: | ||
Proceeds from initial offering of common stock | 68,714 | 0 |
Proceeds from warrant exercise | 116 | 24 |
Proceeds from issuance of debt | 0 | 5,000 |
Payments for deferred financing costs | (4,768) | (610) |
Payments for taxes on share-based compensation | (6,027) | 0 |
Net cash provided by financing activities | 58,035 | 4,414 |
Net increase in cash and cash equivalents | 43,220 | 8,170 |
Cash and cash equivalents: | ||
Beginning of period | 17,379 | 9,209 |
End of period | 60,599 | 17,379 |
Supplemental disclosures of cash flow information: | ||
Cash payments for interest | 6,049 | 5,814 |
Net increase in capital expenditures included in accounts payable and accrued expenses: | 104 | 20 |
Net (decrease) increase in offering costs included in accounts payable and accrued expenses | (588) | 588 |
Accrued Series A-2 and A-3 preferred dividends | 0 | 2,480 |
Accrued withholding tax for share based compensation | 2,515 | 0 |
Deferred financing costs charged to additional paid in capital | 5,232 | 0 |
Noncash component of warrants exercised | $ 12,591 | $ 0 |
Corporate Organization and Comp
Corporate Organization and Company Overview | 12 Months Ended |
Dec. 31, 2018 | |
Corporate Organization and Company Overview [Abstract] | |
Corporate Organization and Company Overview | Note 1. Corporate Organization and Company Overview (A) Company Overview Aquestive Therapeutics, Inc. (“Aquestive” or the “Company”) was formed effective on January 1, 2018 via the conversion of MonoSol Rx, LLC to a Delaware corporation and a simultaneous name change. Prior to that date, the business operated as MonoSol Rx, LLC, a Delaware limited liability company. The financial statement information presented from periods prior to January 1, 2018 are that of MonoSol Rx, LLC. Aquestive is a specialty pharmaceutical company focused on identifying, developing and commercializing differentiated products to address unmet medical needs and solve critical healthcare challenges. The Company has a late-stage proprietary product pipeline focused on the treatment of diseases of the central nervous system, or CNS, and is developing orally administered complex molecules as alternatives to more invasive therapies. Aquestive is pursuing its business objectives through both in-licensing and out-licensing arrangements, as well as the commercialization of its own products. The Company’s major customer and primary commercialization partner has global operations headquartered in the United Kingdom with principal operations in the United States; other customers are principally located in the United States. The Company conducts its production activities at facilities located in Portage, Indiana, and maintains its headquarters, sales and commercialization operations and its primary research laboratory in Warren, New Jersey. Aquestive is subject to risks common to companies in similar industries and stages of development, including, but not limited to, competition from larger companies, reliance on revenue from one product, reliance on a single manufacturing site, new technological innovations, dependence on key personnel, reliance on third-party service providers and sole source suppliers, protection of proprietary technology, compliance with government regulations , d (B) Corporate Conversion, Reorganization, Stock Splits and IPO Corporate Conversion MonoSol Rx, LLC was originally formed in Delaware in January 2004 and until December 31, 2017, the Company conducted its business through MonoSol Rx, LLC, a Delaware limited liability company, or MonoSol. On January 1, 2018, MonoSol converted from a Delaware LLC into a Delaware corporation pursuant to a statutory conversion and changed its name to Aquestive Therapeutics, Inc. Reorganization In a corporate reorganization conducted following the conversion of MonoSol into a Delaware corporation, the holders of membership units of MonoSol contributed their interests in MonoSol to Aquestive Partners, LLC, or APL, in exchange for identical interests in APL. As a result of the exchange, APL was issued 5,000 shares of voting common stock in the Company and became the parent and sole stockholder of the Company. The table below depicts the number of redeemable and non-redeemable interests outstanding for each series of membership interests at December 31, 2017, which were converted to identical interests in APL on a 1:1 basis effective January 1, 2018. December 31, 2017 Redeemable Preferred A-3 Interests 5,055,000 Redeemable Preferred A-2 Interests 82,071,200 Nonredeemable A-1 interests 21,526,850 Nonredeemable A interests 16,886,750 Common Interests 121,228,353 246,768,153 Stock Splits In April 2018, the Board approved an amendment to the Certificate of Incorporation of the Company to: (i) increase the authorized number of capital stock from 25,000 to 350,000,000 shares, (ii) authorize the Non-Voting Common Stock, and (iii) affect a stock split of the Company’s common stock, par value $0.001 per share, such that each share be subdivided and reclassified into 37,212 shares of Voting Common Stock, par value $0.001 per share. In July 2018, the Board approved an additional amendment to the Certificates of Incorporation of the Company to affect a reverse stock split of the Company’s common stock, par value $0.001 per share, such that each 12.34 shares outstanding converted into one share of common stock, par value $0.001 per share. For purposes of these financial statements, the net effect of these stock splits has been presented as if they had occurred on January 1, 2018. Initial Public Offering of Common Stock and Authorized Number of Capital Stock On July 27, 2018, the Company closed the initial public offering (“IPO”) of 4,500,000 shares of common stock at an offering price of $15.00 per share. The Company received net proceeds of approximately $57,543 after deducting underwriting discounts, commissions, and offering related transaction costs of approximately $9,957. On August 15, 2018, the Company was informed that the underwriters exercised their over-allotment option and the Company issued 425,727 additional common shares at $15.00 per share. Upon the closing of such exercise, the Company received additional net proceeds of approximately $5,939, after deducting underwriter discounts of approximately $447. The IPO and overallotment option resulted in total net proceeds of $63,482. Immediately prior to the consummation of the IPO, all of the Company’s outstanding shares of non-voting common stock was automatically converted to 4,922,353 shares of voting common stock. On July 27, 2018, the Board approved an amendment to the Certificate of Incorporation of the Company to decrease the authorized number of capital stock from 350,000,000 to 250,000,000 shares. |
Basis of Presentation
Basis of Presentation | 12 Months Ended |
Dec. 31, 2018 | |
Basis of Presentation [Abstract] | |
Basis of Presentation | Note 2. Basis of Presentation The consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America, or GAAP, and in accordance with the rules and regulations of the Securities and Exchange Commission, or SEC. The accounts of wholly owned subsidiaries are included in the consolidated financial statements. Any reference in these notes to applicable guidance is meant to refer to the authoritative United States generally accepted principles as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Updates (“ASU”) of the Financial Accounting Standards Board (“FASB”). |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2018 | |
Summary of Significant Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Note 3. Summary of Significant Accounting Policies (A) Principles of Consolidation On January 1, 2018 MonoSol Rx, LLC (which previously consolidated MonoSol Rx, Inc. in 2017) was converted from a Delaware LLC into a Delaware corporation pursuant to a statutory conversion under the laws of the State of Delaware. The resulting entity is Aquestive Therapeutics, Inc. into which is consolidated its wholly-owned subsidiary MonoSol Rx, Inc. These consolidated financial statements presented for periods earlier than January 1, 2018 include the accounts of the MonoSol Rx, LLC. and its wholly owned subsidiary, MonoSol Rx, Inc. Other than corporate formation activities, MonoSol Rx, Inc. has conducted no commercial, developmental or operational activities and has no customers or vendors. (B) Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities, including disclosure of contingent assets and contingent liabilities, at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant items subject to estimates and assumptions include allowances for rebates from proprietary product sales, the allowance for sales returns, the useful lives of fixed assets, valuation of share-based compensation, and contingencies. (C) Cash and Cash Equivalents The Company considers all short-term, highly liquid investments purchased with original maturities of three months or less to be cash equivalents. These investments are carried at cost, which approximates fair value. At December 31, 2018 and 2017, the Company had no cash equivalents. (D) Concentration of Credit Risk Cash and cash equivalents are maintained at one federally insured financial institution. The Company has not experienced any losses in such accounts and management believes that the Company is not exposed to any credit risk due to the financial position of the banking institution. (E) Trade Accounts Receivable Trade accounts receivable are recorded at the invoiced amount and do not bear interest. The Company grants credit to customers in the normal course of business, but generally does not require collateral or any other security to support its receivables. The Company’s credit terms generally range from 30 to 60 days, however some credit terms may reach 105 days, depending on the customer and type of invoice. The Company evaluates the collectability of accounts receivable based on a combination of factors. In circumstances where a specific customer is unable to meet its financial obligations to the Company, a provision to the allowances for doubtful accounts is recorded against amounts due in order to reduce the net recognized receivable to the amount that is reasonably expected to be collected. For all other customers, a provision to the allowances for doubtful accounts is recorded based on factors including the length of time the receivables are past due, the current business environment and the Company’s historical experience. Provisions to the allowances for doubtful accounts are recorded to selling, general and administrative expenses. Account balances are charged off against the allowance when it is probable that the receivable will not be recovered. The allowance for doubtful accounts, associated with recoverability of accounts receivable, was $58 and $55 as of December 31, 2018 and 2017, respectively. (F) Inventories Inventories, consisting of purchased materials, direct labor and manufacturing overhead, are stated at the lower of cost, determined by the first-in, first-out method, or net realizable value, in accordance with ASU 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory At each balance sheet date, the Company evaluates inventories for excess quantities, obsolescence or shelf life expiration. This evaluation includes analysis of historical sales levels by product, projections of future demand, the risk of competitive obsolescence for products, general market conditions, and a review of the shelf life expiration dates for products. To the extent that management determines there are excess or obsolete inventory or quantities with a shelf life that is too near its expiration for the Company to reasonably expect that it can sell those products, or use them in production, prior to their expiration, the Company will adjust the carrying value to estimated net realizable value as necessary. (G) Property and Equipment Property and equipment are stated at cost. Depreciation and amortization is computed by the straight line method based on the estimated useful lives of the respective assets, as discussed below. Leasehold improvements are amortized over the lesser of the lease terms or the estimated useful lives of the assets. Maintenance and repair costs are charged to expense as incurred, and expenditures for major renewals and improvements are capitalized. Upon disposition of property and equipment, the related cost and accumulated depreciation and amortization are removed from the accounts, and any gain or loss is reflected in the accompanying Consolidated Statements of Operations and Comprehensive Loss. (H) Intangible Assets Intangible assets include the costs of acquired composition and process technologies and the costs of purchased patents used in the manufacture of orally soluble film. The Company amortizes these assets using the straight-line method over the shorter of their legal lives or estimated useful lives. (I) Impairment of Long-Lived Assets Long lived assets, such as property, plant, and equipment, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If circumstances require a long-lived asset or asset group to be tested for possible impairment, the Company first compares undiscounted cash flows expected to be generated by that asset or asset group to its carrying amount. If the carrying amount of the long-lived asset or asset group is not recoverable on an undiscounted cash flow basis, an impairment is recognized to the extent that the carrying amount exceeds its fair value. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values and third-party independent appraisals, as considered necessary. (J) Revenue Recognition Pursuant to FASB ASC Topic 605, Revenue Recognition Manufacture and Supply Revenue Co-development and Research Fees License and Royalty Revenue Collaborative Arrangements Revenue Recognition – Principal Agent Considerations Proprietary Product sales - . Total reductions of proprietary product sales for these various estimated allowances in 2018 were $591, of which $104 affected Accounts receivable and $487 affected Accrued expenses at December 31, 2018. There were no related allowances and accruals at December 31, 2017, as Sympazan was launched in December 2018. (K) Research and Development Costs incurred in connection with research and development activities are expensed as incurred. Research and development expenses include (i) employee-related expenses, including salaries, benefits, travel and share-based compensation expense, (ii) external research and development expenses incurred under arrangements with third parties, such as contract research and contract manufacturing organizations, investigational sites and consultants, (iii) the cost of acquiring, developing and manufacturing clinical study materials, and (iv) costs associated with preclinical and clinical activities and regulatory operations. Non-refundable advance payments for goods and services that will be used in future research and development activities are expensed when the activity is performed or when the goods have been received, rather than when payment is made, in accordance with ASC 730, Research and Development. (L) Income Taxes From its founding through October 31, 2017, the Company was a limited liability company (“LLC”) treated as a partnership for income tax purposes. From November 1, 2017 through December 31, 2017, the LLC elected to be taxed as a C corporation. On January 1, 2018, the LLC was converted into a Delaware corporation and incorporated as Aquestive Therapeutics, Inc. Income taxes are recorded in accordance with FASB ASC Topic 740 Income Taxes Uncertain tax positions are accounted for in accordance with the provision of ASC 740. When uncertain tax positions exist, the tax benefit is recognized to the extent that the benefit will more likely than not be realized. The determination as to whether the tax benefit will more likely than not be realized is based upon the technical merits of the tax position, as well as consideration of the available facts and circumstances. To date, the Company has not had any significant uncertain tax positions. (M) Share-Based Compensation The Company records share-based compensation expenses for awards of stock options and restricted stock units (RSUs) under Compensation — Stock Compensation, Equity-based Payments to Non-Employees . This standard establishes guidance for the recognition of expenses arising from the issuance of stock-based compensation awards at their fair value at the grant date. Stock-based compensation expense for stock option awards granted after January 1, 2018 is based on their fair value on the grant date using the Black-Scholes-Merton model. Key inputs and assumptions include the stock price at the grant date, exercise price, both the contractual and estimated expected term of the option, and estimates of stock price volatility, expected dividends and a risk-free interest rate. These assumptions require estimates and judgements and changes in those inputs could impact the amount of expenses that are charged to earnings. The Company recognizes compensation expense for the fair value of restricted stock unit and stock option awards over the requisite service period of the award. All excess tax benefits, taxes and tax deficiencies from stock-based compensation are included in the provision for income taxes in the Consolidated Statement of Operations. For issuances of share-based compensation prior to the Company’s conversion from an LLC to a C Corporation, the Company recorded expenses arising from awards of performance units, also based on ASC 718, Compensation – Stock Compensation Subsequent to the Company’s conversion from an LLC to a C Corp, on April 16, 2018, these Performance Unit Plans were formally terminated through actions of both the Board of Directors and the required approvals of certain plan participants. As a result, vesting of any then-unvested performance units was accelerated and the Company issued non-voting common shares to compensate the performance unit holders. In accordance with ASC 718, Compensation — Stock Compensation, If we had made different assumptions in determinations of fair value at either the initial grant dates of the performance units or at the time of issuance of the non-voting common shares issued in settlement of those grants, our equity-based compensation expense, net loss and net loss per share of common stock could have been significantly different. (N) Per Share Data Basic net loss per common share is computed by dividing the net loss attributable to common shareholders by the weighted average number of shares of common stock outstanding during the period. Diluted net income per common share is calculated by dividing net income available to common shareholders (O) Comprehensive Loss Comprehensive loss includes net loss as well as other changes in shareholders shareholders (P) Fair Value Measurements Certain assets and liabilities are reported on a recurring basis at fair value. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. Financial assets and liabilities carried at fair value are to be classified and disclosed in one of the following three levels of the fair value hierarchy, of which the first two are considered observable and the last is considered unobservable: · Level 1 — Quoted prices in active markets for identical assets or liabilities. Cash and cash equivalents consisted of cash in bank checking and savings accounts and money market funds which are all Level 1 assets. · Level 2 — Observable inputs (other than Level 1 quoted prices), such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data. The Company currently has no Level 2 assets or liabilities. · Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques. As of December 31, 2018, the Company has no level 3 assets or liabilities. The Company’s Level 3 liabilities at December 31, 2017 consisted of warrants totaling $7,673. The Company’s warrant liability was stated at fair value based primarily on an independent third-party appraisal prepared as of the reported balance sheet dates consistent with generally-accepted valuation methods of the Uniform Standards of Professional Appraisal Practice, the American Society of Appraisers and the American Institute of Certified Public Accountants’ Accounting and Valuation Guide, Valuation of Privately-Held Company Equity Securities Issued as Compensation. The carrying amounts reported in the balance sheets for trade and other receivables, prepaid and other current assets, accounts payable, accrued expenses and deferred revenue approximate fair value based on the short-term maturity of these assets and liabilities. (Q) Segment Information Operating segments are defined as components of an entity about which separate discrete information is available for evaluation by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance. The Company manages its operations as a single segment for purposes of assessing performance and making operating decisions. (R) Deferred Offering Costs Deferred Offering costs, consisting primarily of direct incremental legal, accounting and other fees relating to the IPO, were capitalized as incurred. As of December 31, 2017, deferred offering costs of $1,050 were included as a component of Other Assets. Upon completion of the Company’s IPO in July 2018, deferred offering costs of $5,232 were reclassified from Other Assets to Additional Paid in Capital in the accompanying balance sheet. (S) Recent Accounting Pronouncements As a public emerging growth company, the Company has elected to take advantage of the extended transition period afforded by Jumpstart Our Business Startups Act for the implementation of new or revised accounting standards and, as a result, the Company will comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for public emerging growth companies. From time to time, new accounting pronouncements are issued by the FASB and adopted by the Company as of the specified effective date. Unless otherwise discussed, the Company believes that the impact of recently issued standards that are not yet effective will not have a material impact on its financial position or results of operations upon adoption. Recently Adopted Accounting Pronouncements: In March 2016, the FASB issued ASU 2016-09, Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting Recent Accounting Pronouncements Not Adopted as of December 31, 2018: In May 2014, the FASB issued Accounting Standards Update No 2014-09, “Revenue from Contracts with Customers” The new standard will be effective for us beginning January 1, 2019 and permits two methods of adoption: the full retrospective method, which requires the standard to be applied to each prior period presented, or the modified retrospective method, which requires the cumulative effect adoption to be recognized as an adjustment to opening retained earnings in the period of adoption. The Company will adopt the standard using the modified retrospective method. The Company has completed an analysis of existing contracts with its customers and assessed the differences in accounting for such contracts under ASU 2014-09 compared with the current revenue accounting standards. The Company concluded that the implementation of ASU 2014-09 will accelerate the timing of revenue recognition of its manufacturing and supply product sales, however, these changes are not expected to be material to the Company’s consolidated financial statements. In addition, the Company further analyzed its existing collaborative licensing contracts and determined that for certain arrangements the identified performance obligation under the new standard will be satisfied over time as opposed to a point in time revenue recognition dictated by the current standard. The cumulative effect of initially applying the new revenue standard approximates $3,700 and will be recorded as an adjustment to the opening balance of retained earnings. In January 2016, the FASB issued revised guidance governing accounting and reporting of financial instruments (ASU 2016-01) and in 2018 issued technical corrections (ASU 2018-03). This guidance requires that equity investments with readily determinable fair values that are classified as available-for-sale be measured at fair value with changes in value reflected in current earnings. This guidance also simplifies the impairment testing of equity investments without readily determinable fair values and alters certain disclosure requirements. ASU No. 2016-01, Financial Instruments – Overall: Recognition and Measurement of Financial Assets and Financial Liabilities In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326) In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments, In June 2018, the FASB issued ASU 2018-07, Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting Subtopic 505-50, Equity—Equity-Based Payments to Non-Employees. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework. Other pronouncements issued by the FASB or other authoritative accounting standards groups with future effective dates are either not applicable or not significant to the consolidated financial statements of the Company. |
Risks and Uncertainties
Risks and Uncertainties | 12 Months Ended |
Dec. 31, 2018 | |
Risks and Uncertainties [Abstract] | |
Risks and Uncertainties | Note 4. Risks and Uncertainties The Company’s cash requirements for 2019 and beyond include expenses related to continuing development and clinical evaluation of its products, costs of regulatory filings, patent prosecution expenses and litigation expenses, expenses related to commercialization of our products, as well as costs to comply with the requirements of being a public company. As of December 31, 2018, we had working capital of $41,249. On July 27 and August 15, 2018, the Company closed the IPO of 4,500,000 and overallotment exercise of 425,727 shares of common stock, respectively, at a price of $15.00 per share raising total net proceeds of $63,482, net of underwriting discounts, legal and accounting professional services and other offering expenses. The Company believes that its revenues from partnered products, cash on hand and the funds received from the IPO are adequate to meet its operating, investing, and financing needs for at least the next twelve months. To the extent additional funds are necessary to meet long-term liquidity needs as the Company continues to execute its business strategy, the Company anticipates that these additional funding requirements will be obtained through monetization of certain royalty streams or through additional, debt or, equity financings or a combination of these potential sources of funds, although the Company can provide no assurance that these sources of funding will be available on reasonable terms, if at all. |
Revenues and Trade Receivables,
Revenues and Trade Receivables, Net | 12 Months Ended |
Dec. 31, 2018 | |
Revenues and Trade Receivables, Net [Roll Forward] | |
Revenues and Trade Receivables, Net | Note 5. Revenues and Trade Receivables, Net The Company’s revenue was comprised of the following: Year Ended December 31, 2018 2017 Manufacture and supply revenue $ 37,319 $ 40,092 License and royalty revenue 24,699 23,133 Co-development and research fees 5,184 3,693 Proprietary product sales, net 228 — Revenues $ 67,430 $ 66,918 Disaggregation of Revenue The following table provides disaggregated net revenue by geographic area: Year Ended December 31, 2018 2017 United States $ 64,565 $ 63,710 Ex-United States 2,865 3,208 Revenues $ 67,430 $ 66,918 Ex-United States revenues is derived primarily from products manufactured for the Australian and Malaysian markets. Accounts receivable, net consist of the following: December 31, 2018 2017 Accounts receivable $ 6,610 $ 6,156 Other receivables 33 78 Less: allowance for bad debt (58 ) (55 ) Less: sales-related allowances (104 ) — Trade and other receivables, net $ 6,481 $ 6,179 Other receivables totaled $33 and $78 as of December 31, 2018 and 2017, respectively, consisting primarily of reimbursable costs incurred on behalf of a customer. Sales allowances in 2018 are estimated in relation to revenues recognized for sales of Sympazan beginning with the launch of this product in December 2018. The following table presents the changes in the allowance for bad debt: December 31, 2018 2017 Allowance for doubtful accounts at beginning of year $ 55 $ 108 Additions charged to bad debt expense 53 — Write-downs charged against the allowance (50 ) — Recoveries of amounts previously reserved — (53 ) Allowance for doubtful accounts at end of year $ 58 $ 55 The following table presents the changes in sales-related allowances: December 31, 2018 2017 Balance at December 31, 2017 $ — $ — Provision related to sales in 2018 104 — Credits and payments — — Balance at December 31, 2018 $ 104 $ — Concentration of Major Customers Customers are considered major customers when sales exceed 10% of total net sales for the period or outstanding receivable balances exceed 10% of total receivables. For the years ended December 31, 2018, and 2017, Indivior, Inc. (“Indivior”) represented 89% and 88% of the total revenues for each period, respectively. As of December 31, 2018 and 2017, the Company’s outstanding receivable balance from Indivior represented approximately 78% and 93% of gross receivables, respectively. |
Material Agreements
Material Agreements | 12 Months Ended |
Dec. 31, 2018 | |
Material Agreements [Abstract] | |
Material Agreements | Note 6. Material Agreements Commercial Exploitation Agreement with Indivior In August 2008, the Company entered into a Commercial Exploitation Agreement with Reckitt Benckiser Pharmaceuticals, Inc. (the “Indivior License Agreement”). Reckitt Benckiser Pharmaceuticals, Inc. was later succeeded to in interest by Indivior, Inc. Pursuant to the Indivior License Agreement, the Company agreed to manufacture and supply Indivior’s requirements for Suboxone, a sublingual film formulation, both inside and outside the United States on an exclusive basis. Under the terms of the Indivior License Agreement, the Company is required to manufacture Suboxone in accordance with current Good Manufacturing Practice standards and according to the specifications and processes set forth in the related quality agreements the Company entered into with Indivior. Additionally, the Company is required to obtain Active Pharmaceutical Ingredients (“API”) for the manufacture of Suboxone directly from Indivior. The Indivior License Agreement specifies a minimum annual threshold quantity of Suboxone that the Company is obligated to fill and requires Indivior to provide the Company with a forecast of its requirements at various specified times throughout the year. The Indivior License Agreement provides for payment by Indivior of a purchase price per unit that is subject to adjustment based on our ability to satisfy minimum product thresholds. Additionally, in the event Indivior purchases certain large quantities of Suboxone during a specified period, Indivior will be entitled to scaled rebates on its purchases. In addition to the purchase price for the Suboxone supplied, Indivior is required to make certain single digit percentage royalty payments tied to net sales value (as provided for in the Indivior License Agreement) in each of the United States and in the rest of the world subject to annual maximum amounts and limited to the life of the related United States or international patents. Indivior exercised its right to buy out its future royalty obligations in the United States under this agreement in 2012. Indivior remains obligated to pay royalties for all sales outside the United States. The Indivior License Agreement contains customary contractual termination provisions, including those for breach, a filing for bankruptcy or corporate dissolution, an invalidation of the intellectual property surrounding Suboxone, or commission of a material breach of the Indivior License Agreement by either party. Additionally, Indivior may terminate if the U.S. Food and Drug Administration (“FDA”) or other applicable regulatory authority declares the Company’s manufacturing site to no longer be suitable for the manufacture of Suboxone or Suboxone is no longer suitable to be manufactured due to health or safety reasons. The initial term of the Indivior License Agreement was seven years from the commencement date. Thereafter, the Indivior License Agreement automatically renews for successive one-year periods, unless Indivior provides the Company with written notice of its intent not to renew at least one year prior to the expiration of the initial or renewal term. Supplemental Agreement with Indivior On September 24, 2017, the Company entered into an agreement with Indivior, or the Indivior Supplemental Agreement. Pursuant to the Indivior Supplemental Agreement, the Company the Company the Company the Company All payments made by Indivior to the Company pursuant to the Indivior Supplemental Agreement are in addition to, and not in place of, any amounts owed by Indivior to the Company pursuant to the Indivior License Agreement. Indivior’s payment obligations under the Indivior Supplemental Agreement are subject to certain factors affecting the market for Suboxone and may terminate prior to January 1, 2023 in the event certain contingencies relating to such market occur. License Agreement with Sunovion Pharmaceuticals, Inc. In April 2016, the Company the Company The Company’s In consideration for the rights granted to Sunovion under the Sunovion License Agreement, the Company the Company has This Sunovion License Agreement will continue until terminated by the Company or Sunovion in accordance with the termination provisions of the Sunovion License Agreement. Absent early termination, the Sunovion License Agreement continues (on a country-by-country basis) until the expiration of all applicable licensed patents. Upon termination, all rights to intellectual property granted to Sunovion to develop and commercialize products will revert to the Company and Sunovion must continue to pay royalties to the Company on each sale of their remaining inventory of products commercialized by Sunovion which include apomorphine as their API. Agreement to Terminate CLA with KemPharm In March 2012, the Company entered into an agreement with KemPharm, Inc. (“KemPharm”), to terminate a Collaboration and License Agreement entered into in April 2011. Under this termination arrangement, the Company has the right to participate in any and all value that KemPharm may derive from the commercialization or any other monetization of KP 415 and KP 484 compounds or their derivatives. Among these monetization transactions are those related to any business combinations involving KemPharm and collaborations, royalty arrangements, or other transactions from which KemPharm may realize value from these compounds. The Company has not received payments under this arrangement during the years ended December 31, 2018 and 2017. |
Inventory
Inventory | 12 Months Ended |
Dec. 31, 2018 | |
Inventory [Abstract] | |
Inventory | Note 7. Inventory Inventory consists of the following: December 31, 2018 2017 Raw material $ 1,283 $ 725 Packaging material 2,975 2,225 Finished goods 1,183 1,064 Total inventory $ 5,441 $ 4,014 |
Property and Equipment, net
Property and Equipment, net | 12 Months Ended |
Dec. 31, 2018 | |
Property and Equipment, net [Abstract] | |
Property and Equipment, net | Note 8. Property and Equipment, Net December 31, Useful Lives 2018 2017 Machinery 3-15 yrs $ 20,681 $ 20,056 Furniture and fixtures 3-15 yrs 1,150 1,109 Leasehold improvements (a) 21,333 21,271 Computer, network equipment and software 3-7 yrs 2,579 2,108 Construction in progress 1,655 921 47,398 45,465 Less: accumulated depreciation and amortization (35,191 ) (32,005 ) Total property and equipment, net $ 12,207 $ 13,460 Leasehold improvements are amortized over the shorter of the lease term or their estimated useful lives. Total depreciation and amortization related to property and equipment were $3,186 and $3,750 for the years ended December 31, 2018 and 2017, respectively. |
Intangible Assets
Intangible Assets | 12 Months Ended |
Dec. 31, 2018 | |
Intangible Assets [Abstract] | |
Intangible Assets | Note 9. Intangible Assets The following table provides the components of identifiable intangible assets, all of which are finite lived: December 31, 2018 2017 Purchase technology-based intangible $ 2,358 $ 2,358 Purchased patent 509 509 2,867 2,867 Less: accumulated amortization (2,663 ) (2,613 ) Intangible assets, net $ 204 $ 254 Amortization expense was $50 and $51 for each of the years ended December 31, 2018 and 2017, respectively. During the remaining life of the purchased patent, estimated annual amortization expense is $50 for each of the years from 2019 to 2022. |
Accrued Expenses
Accrued Expenses | 12 Months Ended |
Dec. 31, 2018 | |
Accrued Expenses [Abstract] | |
Accrued Expenses | Note 10. Accrued Expenses Accrued expenses consisted of the following: December 31, 2018 2017 Accrued Compensation $ 3,604 $ 3,805 Accrued withholding tax for share-based compensation 2,515 — Real estate and personal property taxes 388 372 Accrued distribution expenses 481 — Other 207 225 Total accrued expenses $ 7,195 $ 4,402 |
Loans Payable
Loans Payable | 12 Months Ended |
Dec. 31, 2018 | |
Loans Payable [Abstract] | |
Loans Payable | Note 11. Loans Payable On August 16, 2016, the Company entered into a Loan Agreement and Guaranty with Perceptive Credit Opportunities Fund, LP (“Perceptive”). At closing, the Company borrowed $45,000 from Perceptive and was permitted to borrow up to an additional $5,000 within one year of the closing date based upon achievement of a defined milestone. In March 2017, the Company met its performance obligations under the terms of the credit agreement with Perceptive and drew down the remaining $5,000 of its $50,000 credit facility. The loan proceeds were used to pay the existing debt obligation of $37,500 due to White Oak Global Advisors, LLC, with the balance available for general business purposes. On May 21, 2018, the Company and Perceptive agreed to make certain amendments to the loan agreement then in effect. In the event that a qualified IPO could be consummated on or before December 31, 2018, the Company and Perceptive agreed to postpone the initial loan principal payments, delay the loan maturity date to December 16, 2020 and retain interest rate terms, payable monthly, at one-month LIBOR or approximately 2% plus 9.75%, subject to a minimum rate of 11.75%. Accordingly, commencing on May 31, 2019, seven monthly loan principal payments are due in the amount of $550. Thereafter, monthly principal payments in the amount of $750 are due through the maturity date, December 16, 2020, at which time the full amount of the remaining outstanding loan balance is due. At December 31, 2018, $4,600 was classified as current debt. The Company’s tangible and intangible assets are subject to first priority liens to the extent of the outstanding debt. Further, under the Loan Agreement, as amended, the Company is permitted, subject to Perceptive’s consent, to monetize the royalty and fees derived from sales of certain apomorphine products and, in connection with such monetization Perceptive has agreed to release liens related to these royalties and fees. Other significant terms include financial covenants, change of control triggers and limitations on additional indebtedness, asset sales, acquisitions and dividend payments. Financial covenant requirements include (1) minimum liquidity under which a $4,000 minimum cash balance must be maintained at all times and (2) a minimum revenue requirement under which minimum revenues for the trailing twelve consecutive months, measured at the end of each calendar quarter, must also be met. As of December 31, 2018, the Company was in compliance with all financial covenants. Also, as of that date, the carrying value of the Company’s loan payable approximated its market value. At closing, Perceptive received a warrant to purchase senior common equity interests representing 4.5% of the fully diluted common units of the Company on an as converted basis, which was automatically exercised in full at the time of the IPO (see also Notes 3 and 12). The Company capitalizes legal and other third-party costs incurred in connection with obtaining debt as deferred debt issuance costs and applies the unamortized portion as a reduction of the outstanding face amount of the related loan in accordance with ASU 2015-03, Interest – Imputation of Interest: Simplifying the Presentation of Debt Issuance Costs Unamortized deferred debt issuance costs and deferred debt discounts totaled $2,797 as of December 31, 2018 and $4,493 as of December 31, 2017. |
Warrants
Warrants | 12 Months Ended |
Dec. 31, 2018 | |
Warrants [Abstract] | |
Warrants | Note 12. Warrants The warrant issued to Perceptive in connection with the August 16, 2016 Loan Agreement was, by its terms, to expire on August 16, 2023 and provided certain rights and preferences including anti-dilution adjustments so that, upon exercise, they would represent 4.5% of the Company’s fully diluted common stock on an as converted basis, subject to dilution for certain financing including the issuance of shares upon termination of our PUP Plans. The warrant also provided Perceptive with a put right which, if exercised under certain circumstances, would require the Company to purchase the warrant for $3,000 within the first year of the loan or $5,000 thereafter. Because these re-purchase terms could have required net-cash settlement, the appraised value of this warrant at the time of issuance of $5,800 was classified as a liability, rather than as a component of equity, and was treated as a debt discount, with the unamortized portion applied to reduce the face amount of the loan in the accompanying Consolidated Balance Sheet. The Company used a third-party valuation to assist in determining the fair value of these warrants due to the absence of available Level 1 and Level 2 inputs. The fair values at both the date of the issuance and the balance sheet date were based on unobservable Level 3 inputs. Fair value was based on the aggregate equity of the Company, which was estimated utilizing the income and market valuation approaches. A probability weighted return model was then utilized to allocate the resulting aggregate equity value of the Company to the underlying securities. Estimates and assumptions impacting the fair value measurement included the following factors: the then-current state of development of the Company’s pipeline product candidates, including status of clinical trials; the Company’s progress towards an IPO, including selection of investment bankers, assessment of the IPO marketplace and other funding alternatives; a discount rate of 26.5%, and a volatility rate of 90% for December 31, 2017. Immediately prior to pricing of the Company’s initial public offering, Perceptive received 863,400 shares of common stock issuable pursuant to the automatic exercise of warrants at a total price of $116. As a result, the warrant liability of $12,951 was reclassified to additional paid in capital during the third quarter of 2018. A Level 1 market price of $15.00, the initial price at which the Company’s common stock was publicly offered, was used in determining fair value as of the warrants’ conversion date. A roll-forward of warrant liability is as follows: Balance as of December 31, 2016 $ 6,550 Changes in fair value recognized 1,123 Balance as of December 31, 2017 7,673 Changes in fair value recognized 5,278 Exercise of warrants (12,951 ) Balance as of December 31, 2018 $ — |
Asset Retirement Obligation
Asset Retirement Obligation | 12 Months Ended |
Dec. 31, 2018 | |
Asset Retirement Obligation [Abstract] | |
Asset Retirement Obligation | Note 13. Asset Retirement Obligation The Company’s asset retirement obligation, or ARO, consists of estimated future spending related to removing certain leasehold improvements at its Portage, Indiana, laboratory, the Ameriplex production facility and the Warren, New Jersey, laboratory and returning all facilities to their original condition. Below is a schedule of activity in the Company’s liability for AROs for the years ended December 31, 2018 and 2017: Balance at December 31, 2016 $ 959 Additions — Accretion 122 Balance at December 31, 2017 1,081 Additions 5 Accretion 130 Balance at December 31, 2018 $ 1,216 Depreciation expense related to the ARO assets included in overall depreciation expense for the periods ended December 31, 2018 and 2017 were $27 and $25, respectively. |
Net Loss Per Share
Net Loss Per Share | 12 Months Ended |
Dec. 31, 2018 | |
Net Loss Per Share [Abstract] | |
Net Loss Per Share | Note 14. Net Loss Per Share Basic net loss per share is calculated by dividing net loss by the weighted-average number of common shares. As a result of the Company’s net loss incurred for the year ended December 31, 2018, all potentially dilutive instruments outstanding would have anti-dilutive effects on per-share calculations for this period. Therefore, basic and diluted net loss per share were the same for all periods presented as reflected below. Year Ended December 31, 2018 Numerator: Net loss $ (61,376 ) Denominator: Weighted-average number of common shares – basic and diluted 20,725,526 Loss per common share – basic and diluted $ (2.96 ) As of December 31, 2018, the Company’s potentially dilutive instruments included 1,033,492 options to purchase common shares and 205,175 unvested RSUs that were excluded from the computation of diluted weighted average shares outstanding because these securities had an antidilutive impact due to the loss reported. The LLC equity interests, prior to the corporate conversion and reorganization of the Company described in Note 1, were complex and varied across several series of LLC equity interests conveying different economics and rights. As such, loss per share information prior to the reorganization under the legacy equity structure is not comparable to earnings per share for periods presented after the reorganization. |
Share-Based Compensation
Share-Based Compensation | 12 Months Ended |
Dec. 31, 2018 | |
Share-Based Compensation [Abstract] | |
Share-Based Compensation | Note 15. Share-Based Compensation The Company’s share-based incentive plan costs reflected in the Consolidated Statements of Operations and Comprehensive Loss for the year ended December 31, 2018 included those related to non-voting common shares, restricted stock unit awards (RSUs) and stock option grants. As further detailed below, non-voting common shares were issued in April 2018 to compensate participants in the Company’s previously-maintained Performance Unit Plans at the time that those incentive plans were terminated. Regarding RSUs and options, The Aquestive Therapeutics, Inc. 2018 Equity Incentive Plan was first adopted by the Board of Directors on June 15, 2018 and accordingly, no charges to earnings were recorded in 2017. The Company recognized share-based compensation in its Consolidated Statements of Operations during 2018 as follows: Expense classification: Year Ended December 31, 2018 Manufacturing and supply $ 414 Research and development 2,583 Selling, general and administrative 26,943 Total share-based compensation expenses $ 29,940 Share-based compensation from: Non-voting common shares (A) $ 27,298 Restricted Stock Units (B) 1,085 Stock Options (B) 1,557 Total share-based compensation expenses $ 29,940 In addition to the plans noted above, the Company’s Board of Directors adopted the Aquestive Therapeutics, Inc. Employee Stock Purchase Plan in June 2018 and the Company began rollout of the plan in late 2018. Initial employee purchases under terms of this plan, as outlined below, are expected to be made in 2019. (A) Non-Voting Common Share Issuance The Company had two Performance Unit Plans, both of which fell within the scope of FASB ASC Subtopic 718-30, Compensation – Stock Compensation – Awards Classified as Liabilities. On April 16, 2018, the Company terminated the Performance Unit Plans. The termination was executed in accordance with the provisions of the Plans’ termination, which required both Board of Directors and the certain plan participant approval. As a result, the Company accelerated the vesting of any unvested performance units and issued non-voting common shares to compensate the performance unit holders. Immediately prior to the consummation of the IPO, all of the Company’s outstanding shares of non-voting common stock were automatically converted to 4,922,353 shares of voting common stock. In accordance with ASC 718, Compensation — Stock Compensation, The assumptions for the determination of the fair value of are provided in the following table: Valuation assumptions: Discount for lack of marketability 34% Volatility 90% Weighted average cost of capital 27.5% The discount for lack of marketability takes into consideration the illiquid nature of the security as well as other qualitative characteristics that would make it less marketable than the more senior securities. Volatility was based on that of comparable public companies. The weighted average cost of capital was also based on that of comparable public companies as well as market interest rate data. (B) Share-Based Compensation Equity Awards The Company provides certain employees, non-employee directors and consultants with performance incentives under The Aquestive Therapeutics, Inc. 2018 Equity Incentive Plan (the Plan), adopted by the Board of Directors on June 15, 2018. Under this Plan, the Company may grant restricted stock units, stock options or other stock-based awards in order to align the long-term financial interests of selected participants with those of its shareholders, strengthen the commitment of such persons to the Company, and attract and retain competent and dedicated persons whose efforts will enhance long-term growth, profitability and share value. Restricted stock units and options that have been awarded in 2018 pursuant to terms of the Plan are subject to graded vesting over a service period, which is typically two or three years. Compensation cost is recognized for these awards on a pro-rata basis over the requisite service period for each award granted. At December 31, 2018, there were approximately 2.9 million shares available for grant under the Plans. Restricted stock unit awards (RSUs) The following table summarizes the Company’s awards of restricted stock units for the year ended December 31, 2018. Number of Units Weighted Average Grant Date Fair Value Per Share (In thousands) Unvested at Plan adoption — $ — Granted 265 14.83 Vested (60 ) 15.03 Unvested, December 31, 2018 205 $ 14.77 The Company recognized a charge to 2018 earnings totaling $1,085 related to RSUs awarded during the period from plan adoption through December 31, 2018. The total grant date fair market value of shares vested in 2018 was $896. As of December 31, 2018, there was approximately $2,568 of unrecognized compensation costs related to restricted stock units awarded during 2018. These costs are expected to be recognized over a weighted-average period of less than three years. The RSUs granted to senior management vest in equal quarterly installments over two years; the RSUs granted to key employees are subject to a three-year graduated vesting schedule. These RSUs are not subject to performance-based criteria other than continued employment. There were no RSU grants prior to the year ended December 31, 2018 and there were no forfeitures during the period. Stock option awards The following table summarizes the Company’s stock option activity for the period from Plan adoption in June 2018 through December 31, 2018: (in 000s, except share price data) Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term in Aggregate Intrinsic Value Outstanding at January 1, 2018 — Granted 1,033 $ 14.72 9.55 $ — Exercised, Forfeited, Expired — Outstanding at December 31, 2018 1,033 $ 14.72 9.55 $ — Vested or expected to vest at December 31, 2018 962 $ 14.72 9.55 $ — Exercisable at December 31, 2018 87 $ 15.02 9.56 $ — The weighted average grant date fair value of stock options granted during 2018 was $10.83. The fair values of stock options granted were estimated using the Black-Scholes-Merton pricing model based on the following assumptions: Expected dividend yield 0% Expected volatility 90% Expected term (years) 5.8 - 6.1 Risk-free interest rate 2.8 - 2.9% Aquestive anticipates reinvesting earnings for the foreseeable future in product development and other avenues of share-value growth and accordingly anticipates no dividend payouts. Volatility was determined based on that of comparable public companies, given the lack of any meaningful history regarding its own now-publicly-traded common stock. The expected term of the award was calculated using the simplified method. A weighted average was utilized taking into account the two vesting periods to determine the expected term in years. The risk-free interest rates are derived from the U.S. Treasury yield curve in effect on the date of grant for instruments with a remaining term similar to the expected life of the options. During this year, options were granted with exercise prices ranging from $6.54 to $18.67 and accordingly, given Aquestive’s share price of $6.30 on December 31, 2018, these options provided no intrinsic value at that date. As of December 31, 2018, $8,845 of total unrecognized compensation expenses related to non-vested stock options is expected to be recognized Employee stock purchase plan As noted above, the Company’s Board of Directors adopted the Aquestive Therapeutics, Inc. Employee Stock Purchase Plan (ESPP) in June 2018, plan rollout began in late 2018, and initial employee purchases are expected to be made in 2019. The purpose of the ESPP is to help retain and motivate current employees, to attract new talent, and to provide eligible employees of the Company a convenient manner of purchasing shares of common stock at a discounted price at periodic intervals by means of accumulated payroll deductions. Under the ESPP, a total of 250,000 shares of common stock are currently reserved for issuance. The Company may offer common stock purchase rights biannually under offerings that allow for the purchase of common stock at the lower of 85% of the fair value of shares on either the first or last day of the offering period. The offerings may, or may not, also provide tax advantages. Purchases made via a tax-advantaged offering are intended to qualify as purchases made within the meaning of Section 423 of the Internal Revenue Code. Offerings may run concurrently, or serially, and each offering will be treated as separate and distinct. |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2018 | |
Employee Benefit Plans [Abstract] | |
Employee Benefit Plans | Note 16. Employee Benefit Plans The Company sponsors a defined-contribution 401(k) plan covering all full-time employees and makes matching employer contributions as defined by the terms of that plan. The Company may also make discretionary contributions. Total contributions made to the plan by the Company for the years ended December 31, 2018 and 2017 were $837 and $616, respectively. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2018 | |
Income Taxes [Abstract] | |
Income Taxes | Note 17. Income Taxes From the period January 1, 2017 through October 31, 2017, the Company was a limited liability company (“LLC”) that passed through income and losses to its members for U.S. federal and state income tax purposes. From November 1, 2017 through December 31, 2017, the LLC elected to be taxed as a C corporation. On January 1, 2018, the LLC was converted into a Delaware corporation and treated as a C corporation for tax purposes. The tax effect of temporary differences between the tax bases of assets and liabilities and their financial reporting amounts that give rise to the deferred tax assets and deferred tax liabilities as of December 31, 2018 and 2017 are as follows: December 31, 2018 2017 Deferred tax assets: Accounts receivable $ 16 $ 14 Inventory 120 49 Accrued expenses 15 12 NOL carryforwards 10,899 1,330 Interest limitation imposed by the TJCA 2,124 — Stock Compensation 1,224 — Other 260 319 Property and equipment 1,380 1,145 Orphan Drug and R&D Tax Credits 3,917 113 19,955 2,982 Deferred tax liabilities: Intangible assets (39 ) (45 ) Prepaid expenses (407 ) (148 ) (446 ) (193 Valuation Allowance (19,509 ) (2,789 ) Net deferred tax asset/(liability) $ — $ — At December 31, 2018 and 2017, the Company had federal net operating loss carryforwards of approximately $39,172 and $5,222, respectively, a significant portion of which carryforward for an indefinite period. At December 31, 2018 and 2017, Company also had state net operating loss carryforwards of approximately $37,989 and $4,678, which will begin expiring in 2039 and 2038, respectively. The Company has determined, based upon available evidence, that is more likely than not that the net deferred tax asset will not be realized and accordingly, has provided a full valuation allowance against its net deferred tax assets. Valuation allowances of approximately $19,509, and $2,789 have been established at December 31, 2018 and 2017, respectively. The Company may also be subject to the net operating loss utilization provisions of Section 382 of the Internal Revenue Code. The effect of an ownership change would be the imposition of an annual limitation on the use of NOL carry forwards attributable to periods before the change. At December 31, 2018 the Company does not expect the utilization of the NOL’s to be limited. Entities are also required to evaluate, measure, recognize and disclose any uncertain income tax provisions taken on their income tax returns. The Company has analyzed its tax positions and has concluded that there were no uncertain positions as of December 31, 2018 and 2017. The Company did not have any unrecognized tax benefits and has not accrued any interest or penalties for the years ended December 31, 2018 and 2017. The Company's U.S. federal and state net operating losses have occurred since its election to treat as a C Corporation in 2017 and as such, tax years subject to potential tax examination could apply from that date because the utilization of net operating losses from prior years opens the relevant year to audit by the IRS and/or state taxing authorities. A reconciliation of income tax benefit and the amount computed by applying the statutory federal income tax rates of 21% and 34% to loss before taxes for the years ended December 31, 2018 and 2017, respectively, as follows: Year Ended December 31, 2018 2017 Income taxes at statutory rate 21.00 % 34.00 % Increase (decrease) resulting from: State income tax 7.04 4.06 Permanent differences (7.09 ) (8.90 ) Research & development credit 4.40 1.72 Return to provision 1.48 — Effect of state rate change 0.41 — Valuation allowance (27.24 ) (13.54 ) Effect of the deferred rate change — (17.34 ) Effective tax rate 0.00 % 0.00 % The Tax Cuts and Jobs Act (the “TCJA”) was signed into law on December 22, 2017. In December 2017, the SEC staff issued Staff Accounting Bulletin No. 118 (“SAB 118”) to address the application of U.S. GAAP to situations in which an entity does not have the necessary information available, prepared or analyzed in reasonable detail to complete the accounting for certain income tax effects of the TCJA. That guidance specifies that, for income tax effects of the TCJA that can be reasonably estimated but for which the accounting and measurement analysis is not yet complete, entities should report provisional amounts in the reporting period that includes the enactment date and those provisional amounts can be adjusted for a measurement period not to exceed one year from the enactment date. Additionally, for income tax effects of the TCJA that cannot be reasonably estimated, entities should report provisional amounts for those income tax effects in the first reporting period in which a reasonable estimate can be determined, not to exceed one year from the enactment date. We did not identify items for which the income tax effects of the 2017 TCJA have not been completed and could not be reasonably estimated as of December 31, 2017, and as such, our financial results reflect the income tax effects of the TCJA for which the accounting under ASC Topic 740 is complete. On July 1, 2018, the New Jersey governor signed into law a bill which included significant changes to the New Jersey taxation of corporations. Chiefly, this legislation imposes a 2.5% surtax on taxpayers with allocated net income over $1 million for 2018 and 2019, and a 1.5% sur tax for taxpayers with allocated net income over $1 million for 2020 and 2021. In addition, the state is changing its filing requirements from separate entity reporting to combined reporting on a water's edge basis. Further, there are changes to the state's computation of its dividend received deduction and application of IRC section 163(j). The Company has considered these changes and does not believe this change in law will have a material impact due to availability of significant New Jersey NOL carryforwards to set off against future taxable income and a full valuation allowance against the net deferred tax assets. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies [Abstract] | |
Commitments and Contingencies | Note 18. Commitments and Contingencies (A) Operating Leases The Company has entered into various lease agreements for production and research facilities and offices. Most leases contain renewal options. Certain leases contain purchase options and require the Company to pay for taxes, maintenance and operating expenses. All of the Company’s leases are classified as operating leases. Production and Research Facilities, Portage, Indiana The Company leases a 73,000-square-foot facility (Ameriplex) in Portage, Indiana, to house additional packaging, R&D and other operations. As amended, this lease has a term that extends through September 30, 2022 and contains a renewal option that could extend the lease through September 30, 2026. The Company also leases its current 8,400-square-foot production facility (Melton) in Portage, Indiana, which houses certain research and development offices and current good manufacturing practices, or cGMP, manufacturing operations. The lease contains an option to purchase the facility at any time during the lease term along with a right of first refusal to purchase the facility. In October 2012, the Company entered into an additional five-year extension of the lease of this facility, through March 31, 2018, under the same terms and conditions. In October 2017, the Company extended its lease located in Portage, Indiana, which will expire during March 2023 under the same terms and conditions as its former lease. Office and Laboratory Facilities, Warren, New Jersey The Company leases its headquarters and principal laboratory facility in Warren, New Jersey. Pursuant to various amendments in February 2011, June 2012 and May 2013, the Company has secured additional space to provide for the growth of its laboratory facilities and corporate and administrative requirements. The lease included five two-year renewal options, one of which was exercised in July 2016 to extend this lease through August 31, 2018. During February 2018, the Company extended this lease by eighteen months through February 28, 2020. Rent expense for all leased manufacturing facilities and sales, laboratory and office space were $1,393 and $1,344 for the years ended December 31, 2018 and 2017, respectively. The following schedule presents future minimum lease payments under operating leases as of December 31, 2018, including those derived from renewal options that are deemed noncancelable under FASB ASC Section 840-10-35, Leases - Subsequent Measurement Amount 2019 $ 1,233 2020 881 2021 815 2022 681 2023 65 Thereafter 0 Total $ 3,675 (B) Litigation and Contingencies From time to time, we have been and may again become involved in legal proceedings arising in the ordinary course of business. Patent-Related Litigation Beginning in August 2013, the Company was informed of ANDA filings in the United States by Watson Laboratories, Inc. (now Actavis Laboratories, Inc., or Actavis), Par Pharmaceutical, Inc., or Par, Alvogen Pine Brook, Inc., or Alvogen, Teva Pharmaceuticals USA, Inc., or Teva, Sandoz Inc., or Sandoz, and Mylan Technologies Inc. or Mylan, for the approval by the FDA of generic versions of Suboxone Sublingual Film in the United States. The Company filed patent infringement lawsuits against all six generic companies in the U.S. District Court for the District of Delaware. Of these, cases against three of the six generic companies have been resolved. · Sandoz · Mylan · Par After the commencement of the above-mentioned ANDA patent litigation against Teva, Dr. Reddy’s Laboratories acquired the ANDA filings for Teva’s buprenorphine and naloxone sublingual film that are at issue in these trials. Trials against Dr. Reddy’s, Actavis and Par in the lawsuits involving the Orange Book and process patents occurred in November-December of 2015 and November of 2016. On June 3, 2016, the Court issued its Trial Opinion finding that the asserted claims of U.S. Patent No. 8,603,514, or the ’514 patent, are valid and infringed by Actavis’s and Par’s ANDA Products. On August 31, 2017, the Court upheld U.S. Patent No. 8,900,497, or the ’497 patent, as valid but not infringed by Par’s, Actavis’s or Dr. Reddy’s proposed processes for making their ANDA Products. The Court also again upheld the validity of the ’514 patent but held it was not infringed by Dr. Reddy’s ANDA Products, and upheld the validity of U.S. Patent No. 8,017,150, or the ’150 patent, but held that it was not infringed by Dr. Reddy’s ANDA Products. All of these cases are consolidated on appeal to the Federal Circuit, except that the cases between Indivior and us and Par and certain affiliates have been resolved by a settlement agreement. Oral argument on the consolidated appeals is scheduled for April 1, 2019. Trial against Alvogen was held in September 2017. The only issue raised at trial was whether Alvogen’s ANDA Products and processes infringe the ’514 and ’497 patents; Alvogen did not challenge the validity of the patents. In March 2018, the Court issued its opinion finding that Alvogen’s ANDA products and processes would not infringe the ’514 or ’497 patents. The Company and Indivior appealed the ruling, and the appeal is currently pending before the Federal Circuit, with oral argument scheduled for April 1, 2019. Aquestive is also seeking to enforce our patent rights in multiple cases against BioDelivery Sciences International, Inc., or BDSI. Two cases are currently pending but stayed in the U.S. District Court for the Eastern District of North Carolina: · The first, a declaratory judgment action brought by BDSI against Indivior and Aquestive, seeks declarations of invalidity and non-infringement of U.S. Patents Nos. 7,897,080, or the ’080 patent, 8,652,378, or the ’378 patent, and 8,475,832, or the ’832 patent. This case stayed pending inter partes · The second was filed by the Company and Indivior related to BDSI’s infringing Bunavail product, and alleges infringement of our patent, U.S. Patent No. 8,765,167, or the ’167 patent. This case was initially filed in September 2014 in the U.S. District Court for the District of New Jersey but was transferred to North Carolina. Shortly after the case was filed, BDSI filed an IPR challenging the asserted ’167 patent. On March 24, 2016, the Patent Trial and Appeal Board, or the PTAB, issued a final written decision finding the ’167 patent was not unpatentable. The case was stayed in May 2016 pending the final determination of the ’167 patent IPR proceedings. Following the PTAB’s February 7, 2019, decisions on remand denying institution (discussed further below), Aquestive and Indivior submitted a notice to the Court on February 15, 2019, notifying the Court that the stay should be lifted as result of the PTAB’s decisions. BDSI also sent a letter to the Court on February 13, 2019, indicating its intent to appeal the PTAB’s decisions. The parties are awaiting further action from the Court. On January 13, 2017, the Company also sued BDSI asserting infringement of the ’167 patent by BDSI’s Belbuca product. The case was originally filed in the U.S. District Court for the District of New Jersey and was later transferred to the U.S. District Court for the District of Delaware by agreement of the parties. On October 16, 2018, the Delaware Court issued an order transferring the case to the U.S. Court District for the Eastern District of North Carolina. Upon transfer to the Eastern District of North Carolina, BDSI filed a motion to dismiss and a motion to stay the case pending the proceedings before the PTAB on the ’167 patent (described further below). Following the PTAB’s February 7, 2019, decisions on remand denying institution, the Company submitted a notice to the Court on February 15, 2019, notifying the Court that BDSI’s motion to stay should be denied as moot. BDSI also sent a letter to the Court on February 13, 2019, indicating its intent to appeal the PTAB’s decisions. The parties are awaiting further action from the Court. On November 28, 2016, after the PTAB issued its final written decisions finding that the ’167 patent was not unpatentable in IPR2015-00165, IPR2015-00168 and IPR2015-00169, BDSI filed a notice of appeal of those decisions to the U.S. Court of Appeals for the Federal Circuit. The case was fully briefed, and the Court heard oral arguments on February 9, 2018. On June 19, 2018, BDSI filed a motion to terminate and remand the appeal, which the Company opposed. On July 31, 2018, the Federal Circuit granted the motion, vacating the PTAB’s decisions and remanding for further proceedings before the PTAB. On February 7, 2019, the PTAB denied BDSI’s petitions in their entirety and terminated the IPR proceedings. In September 2017, Indivior brought suit against Alvogen for infringement of U.S. Patent No. 9,687,454, or the ’454 patent, based on the filing of an ANDA seeking approval for a generic version of Suboxone Sublingual Film, in the U.S. District Court for the District of New Jersey. In February 2018, Aquestive and Indivior amended the complaint, which added us as a plaintiff and a claim for infringement of U.S. Patent No. 9,855,221, or the ’221 patent. Indivior brought suits against Dr. Reddy’s and Teva in September 2017, and against Par and certain affiliates in October 2017, for infringement of the ’454 patent, in the U.S. District Court for the District of New Jersey. Indivior also brought suit in September 2017 against Actavis Laboratories UT, Inc. for infringement of the ’454 patent, in the U.S. District Court for the District of Utah. On March 13, 2018, the Court granted transfer of this case to the U.S. District Court for the District of Delaware. In February 2018, the Company and Indivior brought suit against Actavis, Dr. Reddy’s, Teva, and Par and certain affiliates for infringement of the ’221 patent. The suit against Actavis was filed in the U.S. District Court for the District of Utah, and the other three cases were filed in the U.S. District Court for the District of New Jersey. In April 2018, the Company brought suit with Indivior against Actavis, Alvogen, Dr. Reddy’s, Teva, and Par and certain affiliates for infringement of U.S. Patent No. 9,931,305, or the ’305 patent. The cases against Alvogen, Dr. Reddy’s, Teva, and Par are pending in the U.S. District Court for the District of New Jersey, and they have each been consolidated with the actions asserting infringement of the ’454 and ’221 patents. Following transfer of the case asserting the ’454 patent from Utah to Delaware, and by agreement of the parties, the cases against Actavis asserting infringement of the ’454, ’221, and ’305 patents are consolidated in a single action pending in the U.S. District Court for the District of Delaware. All matters involving Par were resolved on May 11, 2018, when Aquestive, Indivior, and Par and certain of its affiliates entered into a settlement agreement resolving patent litigation related to Suboxone (buprenorphine and Naloxone) Sublingual Film. As required by law, the parties submitted the settlement agreement to the U.S. Federal Trade Commission and the U.S. Department of Justice for review. On June 14, 2018, Dr. Reddy’s notified the U.S. District Court for the District of New Jersey that the FDA had granted final approval of its ANDAs and that it had launched generic versions of Suboxone Sublingual Film. The Company and Indivior filed a motion for a preliminary injunction and a request for a temporary restraining order, and the Court granted the request on June 15, 2018 enjoining and restraining Dr. Reddy’s from offering for sale, selling or importing its generic versions of Suboxone Sublingual Film. On July 13, 2018, the Court granted the preliminary injunction, which enjoined Dr. Reddy’s from launching a generic version of Suboxone during the pendency of the litigation and until further order from the Court. Dr. Reddy’s appealed the preliminary injunction ruling to the Federal Circuit, and the Court heard oral argument on the appeal on October 4, 2018. On November 20, 2018, the Federal Circuit issued an opinion and judgment vacating the preliminary injunction. On February 4, 2019, the Federal Circuit denied our petition for panel rehearing and rehearing en banc. The mandate from the Federal Circuit issued on February 19, 2019, and the Judge in the District of New Jersey vacated the preliminary injunction against Dr. Reddy’s the same day. On January 22, 2019, the Company and Indivior filed a motion for preliminary injunction and request for a temporary restraining order, seeking to prevent Alvogen from launching its generic versions of Suboxone Sublingual Film. The FDA granted final approval to Alvogen’s generic versions of Suboxone Sublingual Film on January 24, 2019. The Court entered a temporary restraining order on January 25, 2019, enjoining and restraining Alvogen from offering for sale, selling or importing its generic versions of Suboxone Sublingual Film. On February 2, 2019, the Court entered the parties’ stipulation enjoining Alvogen from offering for sale, selling or importing its generic versions of Suboxone Sublingual Film unless and until the dissolution or vacation of the injunction against Dr. Reddy’s. Following issuance of the mandate in the Dr. Reddy’s matter described above, on February 19, 2019, the Judge in the District of New Jersey also vacated the injunction against Alvogen. The orders by the Judge in the District of New Jersey in the Dr. Reddy’s and Alvogen matters described above permit Dr. Reddy’s and Alvogen to launch their generic versions of Suboxone Sublingual Film prior to the expiration of the patents at issue in those matters. Accordingly, on February 19, 2019, Indivior launched the authorized generic version of Suboxone Sublingual Film, which we manufacture exclusively for sale and marketing by Sandoz Inc. as sub-licensee of Indivior. On February 20, 2019, both Dr. Reddy’s and Alvogen both announced that they had launched their generic versions of Suboxone Sublingual Film, and on February 22, 2019, Mylan Pharmaceuticals, Inc. also launched their generic version of Suboxone Sublingual Film. These launches are “at risk” because Dr. Reddy’s and Alvogen have launched their generic versions of Suboxone Sublingual Film even though they are the subject of ongoing patent infringement litigation. Antitrust Litigation On September 22, 2016, forty-one states and the District of Columbia, or the States, brought suit against Indivior and the Company in the U.S. District Court for the Eastern District of Pennsylvania, alleging violations of federal and state antitrust statutes and state unfair trade and consumer protection laws relating to Indivior’s launch of Suboxone Sublingual Film in 2010. After filing, the case was consolidated for pre-trial purposes with the In re Suboxone (Buprenorphine Hydrochloride and Naloxone) Antitrust Litigation Product Litigation On December 27, 2016, Aquestive was named as a co-defendant in product liability suit brought by Laurence and Michelle Allen, as Co-Administrators of the Estate of John Bradley Allen, in the U.S. District Court for the Northern District of New York. This suit, which also named Indivior Inc. and Indivior PLC as defendants, asserts causes of action for negligence, strict liability, and failure to warn against the defendants in connection with the manufacture and sale of Suboxone Sublingual Film. Plaintiffs allege that John Bradley Allen’s use of Suboxone Sublingual Film was a substantial contributing cause of his mental anguish and death and seek $100 million in damages. All defendants moved to dismiss the complaint on April 10, 2017, and those motions were fully briefed on May 18, 2017. Aquestive was dismissed from the case on May 9, 2017, and the remainder of the case was closed on August 9, 2018, after the complaint was dismissed in favor of Indivior. |
Quarterly Financial Data (unaud
Quarterly Financial Data (unaudited) | 12 Months Ended |
Dec. 31, 2018 | |
Quarterly Financial Data (unaudited) [Abstract] | |
Quarterly Financial Data (unaudited) | Note 19. Quarterly Financial Data (unaudited) The following tables contain selected quarterly financial information from 2018 and 2017 (in thousands, except per share amounts). The Company believes that this information reflects all normal recurring adjustments necessary for a fair statement of the information for the periods presented. The operating results for any quarter are not necessarily indicative of results for any future period. Three Months Ended March 31, 2018 June 30, 2018 September 30, 2018 December 31, 2018 Revenues $ 23,411 $ 13,928 $ 13,267 $ 16,824 Manufacture and supply 5,636 4,973 5,592 4,787 Total costs and expenses 18,106 46,614 22,471 29,173 Net income (loss) 4,099 (36,493) (15,038) (13,944) Basic and diluted net income (loss) per common share $ 0.27 $ (1.90) $ (0.64) $ (0.56) Three Months Ended March 31, 2017 June 30, 2017 September 30, 2017 December 31, 2017 Revenues $ 16,436 $ 11,142 $ 27,146 $ 12,194 Manufacture and supply 4,184 5,141 4,880 5,615 Total costs and expenses 15,655 15,201 16,725 19,450 Net income (loss) (1,457) (5,897) 8,451 (10,040) For periods in which the Company reported a net loss, potentially dilutive securities were excluded from the computation of per share amounts. For all 2017 periods, the Company operated as an LLC with an equity structure that was unlike that of the current year and accordingly, per share data for 2017 is not comparable to that of 2018 and has not been presented (Note 14). |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Basis of Presentation [Abstract] | |
Basis of Presentation | The consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America, or GAAP, and in accordance with the rules and regulations of the Securities and Exchange Commission, or SEC. The accounts of wholly owned subsidiaries are included in the consolidated financial statements. Any reference in these notes to applicable guidance is meant to refer to the authoritative United States generally accepted principles as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Updates (“ASU”) of the Financial Accounting Standards Board (“FASB”). |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2018 | |
Summary of Significant Accounting Policies [Abstract] | |
Principles of Consolidation | (A) Principles of Consolidation On January 1, 2018 MonoSol Rx, LLC (which previously consolidated MonoSol Rx, Inc. in 2017) was converted from a Delaware LLC into a Delaware corporation pursuant to a statutory conversion under the laws of the State of Delaware. The resulting entity is Aquestive Therapeutics, Inc. into which is consolidated its wholly-owned subsidiary MonoSol Rx, Inc. These consolidated financial statements presented for periods earlier than January 1, 2018 include the accounts of the MonoSol Rx, LLC. and its wholly owned subsidiary, MonoSol Rx, Inc. Other than corporate formation activities, MonoSol Rx, Inc. has conducted no commercial, developmental or operational activities and has no customers or vendors. |
Use of Estimates | (B) Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities, including disclosure of contingent assets and contingent liabilities, at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant items subject to estimates and assumptions include allowances for rebates from proprietary product sales, the allowance for sales returns, the useful lives of fixed assets, valuation of share-based compensation, and contingencies. |
Cash and Cash Equivalents | (C) Cash and Cash Equivalents The Company considers all short-term, highly liquid investments purchased with original maturities of three months or less to be cash equivalents. These investments are carried at cost, which approximates fair value. At December 31, 2018 and 2017, the Company had no cash equivalents. |
Concentration of Credit Risk | (D) Concentration of Credit Risk Cash and cash equivalents are maintained at one federally insured financial institution. The Company has not experienced any losses in such accounts and management believes that the Company is not exposed to any credit risk due to the financial position of the banking institution. |
Trade Accounts Receivable | (E) Trade Accounts Receivable Trade accounts receivable are recorded at the invoiced amount and do not bear interest. The Company grants credit to customers in the normal course of business, but generally does not require collateral or any other security to support its receivables. The Company’s credit terms generally range from 30 to 60 days, however some credit terms may reach 105 days, depending on the customer and type of invoice. The Company evaluates the collectability of accounts receivable based on a combination of factors. In circumstances where a specific customer is unable to meet its financial obligations to the Company, a provision to the allowances for doubtful accounts is recorded against amounts due in order to reduce the net recognized receivable to the amount that is reasonably expected to be collected. For all other customers, a provision to the allowances for doubtful accounts is recorded based on factors including the length of time the receivables are past due, the current business environment and the Company’s historical experience. Provisions to the allowances for doubtful accounts are recorded to selling, general and administrative expenses. Account balances are charged off against the allowance when it is probable that the receivable will not be recovered. The allowance for doubtful accounts, associated with recoverability of accounts receivable, was $58 and $55 as of December 31, 2018 and 2017, respectively. |
Inventories | (F) Inventories Inventories, consisting of purchased materials, direct labor and manufacturing overhead, are stated at the lower of cost, determined by the first-in, first-out method, or net realizable value, in accordance with ASU 2015-11, Inventory (Topic 330): Simplifying the Measurement of Inventory At each balance sheet date, the Company evaluates inventories for excess quantities, obsolescence or shelf life expiration. This evaluation includes analysis of historical sales levels by product, projections of future demand, the risk of competitive obsolescence for products, general market conditions, and a review of the shelf life expiration dates for products. To the extent that management determines there are excess or obsolete inventory or quantities with a shelf life that is too near its expiration for the Company to reasonably expect that it can sell those products, or use them in production, prior to their expiration, the Company will adjust the carrying value to estimated net realizable value as necessary. |
Property and Equipment | (G) Property and Equipment Property and equipment are stated at cost. Depreciation and amortization is computed by the straight line method based on the estimated useful lives of the respective assets, as discussed below. Leasehold improvements are amortized over the lesser of the lease terms or the estimated useful lives of the assets. Maintenance and repair costs are charged to expense as incurred, and expenditures for major renewals and improvements are capitalized. Upon disposition of property and equipment, the related cost and accumulated depreciation and amortization are removed from the accounts, and any gain or loss is reflected in the accompanying Consolidated Statements of Operations and Comprehensive Loss. |
Intangible Assets | (H) Intangible Assets Intangible assets include the costs of acquired composition and process technologies and the costs of purchased patents used in the manufacture of orally soluble film. The Company amortizes these assets using the straight-line method over the shorter of their legal lives or estimated useful lives. |
Impairment of Long-Lived Assets | (I) Impairment of Long-Lived Assets Long lived assets, such as property, plant, and equipment, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If circumstances require a long-lived asset or asset group to be tested for possible impairment, the Company first compares undiscounted cash flows expected to be generated by that asset or asset group to its carrying amount. If the carrying amount of the long-lived asset or asset group is not recoverable on an undiscounted cash flow basis, an impairment is recognized to the extent that the carrying amount exceeds its fair value. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values and third-party independent appraisals, as considered necessary. |
Revenue Recognition | (J) Revenue Recognition Pursuant to FASB ASC Topic 605, Revenue Recognition Manufacture and Supply Revenue Co-development and Research Fees License and Royalty Revenue Collaborative Arrangements Revenue Recognition – Principal Agent Considerations Proprietary Product sales - . Total reductions of proprietary product sales for these various estimated allowances in 2018 were $591, of which $104 affected Accounts receivable and $487 affected Accrued expenses at December 31, 2018. There were no related allowances and accruals at December 31, 2017, as Sympazan was launched in December 2018. |
Research and Development | (K) Research and Development Costs incurred in connection with research and development activities are expensed as incurred. Research and development expenses include (i) employee-related expenses, including salaries, benefits, travel and share-based compensation expense, (ii) external research and development expenses incurred under arrangements with third parties, such as contract research and contract manufacturing organizations, investigational sites and consultants, (iii) the cost of acquiring, developing and manufacturing clinical study materials, and (iv) costs associated with preclinical and clinical activities and regulatory operations. Non-refundable advance payments for goods and services that will be used in future research and development activities are expensed when the activity is performed or when the goods have been received, rather than when payment is made, in accordance with ASC 730, Research and Development. |
Income Taxes | (L) Income Taxes From its founding through October 31, 2017, the Company was a limited liability company (“LLC”) treated as a partnership for income tax purposes. From November 1, 2017 through December 31, 2017, the LLC elected to be taxed as a C corporation. On January 1, 2018, the LLC was converted into a Delaware corporation and incorporated as Aquestive Therapeutics, Inc. Income taxes are recorded in accordance with FASB ASC Topic 740 Income Taxes Uncertain tax positions are accounted for in accordance with the provision of ASC 740. When uncertain tax positions exist, the tax benefit is recognized to the extent that the benefit will more likely than not be realized. The determination as to whether the tax benefit will more likely than not be realized is based upon the technical merits of the tax position, as well as consideration of the available facts and circumstances. To date, the Company has not had any significant uncertain tax positions. |
Share-Based Compensation | (M) Share-Based Compensation The Company records share-based compensation expenses for awards of stock options and restricted stock units (RSUs) under Compensation — Stock Compensation, Equity-based Payments to Non-Employees . This standard establishes guidance for the recognition of expenses arising from the issuance of stock-based compensation awards at their fair value at the grant date. Stock-based compensation expense for stock option awards granted after January 1, 2018 is based on their fair value on the grant date using the Black-Scholes-Merton model. Key inputs and assumptions include the stock price at the grant date, exercise price, both the contractual and estimated expected term of the option, and estimates of stock price volatility, expected dividends and a risk-free interest rate. These assumptions require estimates and judgements and changes in those inputs could impact the amount of expenses that are charged to earnings. The Company recognizes compensation expense for the fair value of restricted stock unit and stock option awards over the requisite service period of the award. All excess tax benefits, taxes and tax deficiencies from stock-based compensation are included in the provision for income taxes in the Consolidated Statement of Operations. For issuances of share-based compensation prior to the Company’s conversion from an LLC to a C Corporation, the Company recorded expenses arising from awards of performance units, also based on ASC 718, Compensation – Stock Compensation Subsequent to the Company’s conversion from an LLC to a C Corp, on April 16, 2018, these Performance Unit Plans were formally terminated through actions of both the Board of Directors and the required approvals of certain plan participants. As a result, vesting of any then-unvested performance units was accelerated and the Company issued non-voting common shares to compensate the performance unit holders. In accordance with ASC 718, Compensation — Stock Compensation, If we had made different assumptions in determinations of fair value at either the initial grant dates of the performance units or at the time of issuance of the non-voting common shares issued in settlement of those grants, our equity-based compensation expense, net loss and net loss per share of common stock could have been significantly different. |
Per Share Data | (N) Per Share Data Basic net loss per common share is computed by dividing the net loss attributable to common shareholders by the weighted average number of shares of common stock outstanding during the period. Diluted net income per common share is calculated by dividing net income available to common shareholders |
Comprehensive Loss | (O) Comprehensive Loss Comprehensive loss includes net loss as well as other changes in shareholders shareholders |
Fair Value Measurements | (P) Fair Value Measurements Certain assets and liabilities are reported on a recurring basis at fair value. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. Financial assets and liabilities carried at fair value are to be classified and disclosed in one of the following three levels of the fair value hierarchy, of which the first two are considered observable and the last is considered unobservable: · Level 1 — Quoted prices in active markets for identical assets or liabilities. Cash and cash equivalents consisted of cash in bank checking and savings accounts and money market funds which are all Level 1 assets. · Level 2 — Observable inputs (other than Level 1 quoted prices), such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data. The Company currently has no Level 2 assets or liabilities. · Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques. As of December 31, 2018, the Company has no level 3 assets or liabilities. The Company’s Level 3 liabilities at December 31, 2017 consisted of warrants totaling $7,673. The Company’s warrant liability was stated at fair value based primarily on an independent third-party appraisal prepared as of the reported balance sheet dates consistent with generally-accepted valuation methods of the Uniform Standards of Professional Appraisal Practice, the American Society of Appraisers and the American Institute of Certified Public Accountants’ Accounting and Valuation Guide, Valuation of Privately-Held Company Equity Securities Issued as Compensation. The carrying amounts reported in the balance sheets for trade and other receivables, prepaid and other current assets, accounts payable, accrued expenses and deferred revenue approximate fair value based on the short-term maturity of these assets and liabilities. |
Segment Information | (Q) Segment Information Operating segments are defined as components of an entity about which separate discrete information is available for evaluation by the chief operating decision maker, or decision-making group, in deciding how to allocate resources and in assessing performance. The Company manages its operations as a single segment for purposes of assessing performance and making operating decisions. |
Deferred Offering Costs | (R) Deferred Offering Costs Deferred Offering costs, consisting primarily of direct incremental legal, accounting and other fees relating to the IPO, were capitalized as incurred. As of December 31, 2017, deferred offering costs of $1,050 were included as a component of Other Assets. Upon completion of the Company’s IPO in July 2018, deferred offering costs of $5,232 were reclassified from Other Assets to Additional Paid in Capital in the accompanying balance sheet. |
Recent Accounting Pronouncements | (S) Recent Accounting Pronouncements As a public emerging growth company, the Company has elected to take advantage of the extended transition period afforded by Jumpstart Our Business Startups Act for the implementation of new or revised accounting standards and, as a result, the Company will comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for public emerging growth companies. From time to time, new accounting pronouncements are issued by the FASB and adopted by the Company as of the specified effective date. Unless otherwise discussed, the Company believes that the impact of recently issued standards that are not yet effective will not have a material impact on its financial position or results of operations upon adoption. Recently Adopted Accounting Pronouncements: In March 2016, the FASB issued ASU 2016-09, Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting Recent Accounting Pronouncements Not Adopted as of December 31, 2018: In May 2014, the FASB issued Accounting Standards Update No 2014-09, “Revenue from Contracts with Customers” The new standard will be effective for us beginning January 1, 2019 and permits two methods of adoption: the full retrospective method, which requires the standard to be applied to each prior period presented, or the modified retrospective method, which requires the cumulative effect adoption to be recognized as an adjustment to opening retained earnings in the period of adoption. The Company will adopt the standard using the modified retrospective method. The Company has completed an analysis of existing contracts with its customers and assessed the differences in accounting for such contracts under ASU 2014-09 compared with the current revenue accounting standards. The Company concluded that the implementation of ASU 2014-09 will accelerate the timing of revenue recognition of its manufacturing and supply product sales, however, these changes are not expected to be material to the Company’s consolidated financial statements. In addition, the Company further analyzed its existing collaborative licensing contracts and determined that for certain arrangements the identified performance obligation under the new standard will be satisfied over time as opposed to a point in time revenue recognition dictated by the current standard. The cumulative effect of initially applying the new revenue standard approximates $3,700 and will be recorded as an adjustment to the opening balance of retained earnings. In January 2016, the FASB issued revised guidance governing accounting and reporting of financial instruments (ASU 2016-01) and in 2018 issued technical corrections (ASU 2018-03). This guidance requires that equity investments with readily determinable fair values that are classified as available-for-sale be measured at fair value with changes in value reflected in current earnings. This guidance also simplifies the impairment testing of equity investments without readily determinable fair values and alters certain disclosure requirements. ASU No. 2016-01, Financial Instruments – Overall: Recognition and Measurement of Financial Assets and Financial Liabilities In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326) In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments, In June 2018, the FASB issued ASU 2018-07, Compensation—Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting Subtopic 505-50, Equity—Equity-Based Payments to Non-Employees. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework. Other pronouncements issued by the FASB or other authoritative accounting standards groups with future effective dates are either not applicable or not significant to the consolidated financial statements of the Company. |
Corporate Organization and Co_2
Corporate Organization and Company Overview (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Corporate Organization and Company Overview [Abstract] | |
Redeemable and Non-redeemable Interests Outstanding for Each Series of Membership Interests | The table below depicts the number of redeemable and non-redeemable interests outstanding for each series of membership interests at December 31, 2017, which were converted to identical interests in APL on a 1:1 basis effective January 1, 2018. December 31, 2017 Redeemable Preferred A-3 Interests 5,055,000 Redeemable Preferred A-2 Interests 82,071,200 Nonredeemable A-1 interests 21,526,850 Nonredeemable A interests 16,886,750 Common Interests 121,228,353 246,768,153 |
Revenues and Trade Receivable_2
Revenues and Trade Receivables, Net (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Revenues and Trade Receivables, Net [Roll Forward] | |
Revenue | The Company’s revenue was comprised of the following: Year Ended December 31, 2018 2017 Manufacture and supply revenue $ 37,319 $ 40,092 License and royalty revenue 24,699 23,133 Co-development and research fees 5,184 3,693 Proprietary product sales, net 228 — Revenues $ 67,430 $ 66,918 |
Disaggregation of Revenue | The following table provides disaggregated net revenue by geographic area: Year Ended December 31, 2018 2017 United States $ 64,565 $ 63,710 Ex-United States 2,865 3,208 Revenues $ 67,430 $ 66,918 |
Accounts Receivable, Net | Accounts receivable, net consist of the following: December 31, 2018 2017 Accounts receivable $ 6,610 $ 6,156 Other receivables 33 78 Less: allowance for bad debt (58 ) (55 ) Less: sales-related allowances (104 ) — Trade and other receivables, net $ 6,481 $ 6,179 |
Changes in Allowance for Bad Debts | The following table presents the changes in the allowance for bad debt: December 31, 2018 2017 Allowance for doubtful accounts at beginning of year $ 55 $ 108 Additions charged to bad debt expense 53 — Write-downs charged against the allowance (50 ) — Recoveries of amounts previously reserved — (53 ) Allowance for doubtful accounts at end of year $ 58 $ 55 |
Sales-related Allowances | The following table presents the changes in sales-related allowances: December 31, 2018 2017 Balance at December 31, 2017 $ — $ — Provision related to sales in 2018 104 — Credits and payments — — Balance at December 31, 2018 $ 104 $ — |
Inventory (Tables)
Inventory (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Inventory [Abstract] | |
Inventory | Inventory consists of the following: December 31, 2018 2017 Raw material $ 1,283 $ 725 Packaging material 2,975 2,225 Finished goods 1,183 1,064 Total inventory $ 5,441 $ 4,014 |
Property and Equipment, net (Ta
Property and Equipment, net (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Property and Equipment, net [Abstract] | |
Property and Equipment, Net | December 31, Useful Lives 2018 2017 Machinery 3-15 yrs $ 20,681 $ 20,056 Furniture and fixtures 3-15 yrs 1,150 1,109 Leasehold improvements (a) 21,333 21,271 Computer, network equipment and software 3-7 yrs 2,579 2,108 Construction in progress 1,655 921 47,398 45,465 Less: accumulated depreciation and amortization (35,191 ) (32,005 ) Total property and equipment, net $ 12,207 $ 13,460 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Intangible Assets [Abstract] | |
Identifiable Intangible Assets | The following table provides the components of identifiable intangible assets, all of which are finite lived: December 31, 2018 2017 Purchase technology-based intangible $ 2,358 $ 2,358 Purchased patent 509 509 2,867 2,867 Less: accumulated amortization (2,663 ) (2,613 ) Intangible assets, net $ 204 $ 254 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Accrued Expenses [Abstract] | |
Accrued Expenses | Accrued expenses consisted of the following: December 31, 2018 2017 Accrued Compensation $ 3,604 $ 3,805 Accrued withholding tax for share-based compensation 2,515 — Real estate and personal property taxes 388 372 Accrued distribution expenses 481 — Other 207 225 Total accrued expenses $ 7,195 $ 4,402 |
Warrants (Tables)
Warrants (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Warrants [Abstract] | |
Warrant Liability | A roll-forward of warrant liability is as follows: Balance as of December 31, 2016 $ 6,550 Changes in fair value recognized 1,123 Balance as of December 31, 2017 7,673 Changes in fair value recognized 5,278 Exercise of warrants (12,951 ) Balance as of December 31, 2018 $ — |
Asset Retirement Obligation (Ta
Asset Retirement Obligation (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Asset Retirement Obligation [Abstract] | |
Liability for Asset Retirement Obligations | Below is a schedule of activity in the Company’s liability for AROs for the years ended December 31, 2018 and 2017: Balance at December 31, 2016 $ 959 Additions — Accretion 122 Balance at December 31, 2017 1,081 Additions 5 Accretion 130 Balance at December 31, 2018 $ 1,216 |
Net Loss Per Share (Tables)
Net Loss Per Share (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Net Loss Per Share [Abstract] | |
Basic and Diluted Net Loss Per Share | As a result of the Company’s net loss incurred for the year ended December 31, 2018, all potentially dilutive instruments outstanding would have anti-dilutive effects on per-share calculations for this period. Therefore, basic and diluted net loss per share were the same for all periods presented as reflected below. Year Ended December 31, 2018 Numerator: Net loss $ (61,376 ) Denominator: Weighted-average number of common shares – basic and diluted 20,725,526 Loss per common share – basic and diluted $ (2.96 ) |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Share-Based Compensation [Abstract] | |
Share-based Compensation Expense | The Company recognized share-based compensation in its Consolidated Statements of Operations during 2018 as follows: Expense classification: Year Ended December 31, 2018 Manufacturing and supply $ 414 Research and development 2,583 Selling, general and administrative 26,943 Total share-based compensation expenses $ 29,940 Share-based compensation from: Non-voting common shares (A) $ 27,298 Restricted Stock Units (B) 1,085 Stock Options (B) 1,557 Total share-based compensation expenses $ 29,940 |
Valuation Assumptions for Determination of Fair Value | The assumptions for the determination of the fair value of are provided in the following table: Valuation assumptions: Discount for lack of marketability 34% Volatility 90% Weighted average cost of capital 27.5% |
Restricted Stock Shares Activity | The following table summarizes the Company’s awards of restricted stock units for the year ended December 31, 2018. Number of Units Weighted Average Grant Date Fair Value Per Share (In thousands) Unvested at Plan adoption — $ — Granted 265 14.83 Vested (60 ) 15.03 Unvested, December 31, 2018 205 $ 14.77 |
Stock Option Activity | The following table summarizes the Company’s stock option activity for the period from Plan adoption in June 2018 through December 31, 2018: (in 000s, except share price data) Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term in Aggregate Intrinsic Value Outstanding at January 1, 2018 — Granted 1,033 $ 14.72 9.55 $ — Exercised, Forfeited, Expired — Outstanding at December 31, 2018 1,033 $ 14.72 9.55 $ — Vested or expected to vest at December 31, 2018 962 $ 14.72 9.55 $ — Exercisable at December 31, 2018 87 $ 15.02 9.56 $ — |
Valuation Assumptions for Determination of Fair Value of Options | The fair values of stock options granted were estimated using the Black-Scholes-Merton pricing model based on the following assumptions: Expected dividend yield 0% Expected volatility 90% Expected term (years) 5.8 - 6.1 Risk-free interest rate 2.8 - 2.9% |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Income Taxes [Abstract] | |
Deferred Tax Assets and Liabilities | The tax effect of temporary differences between the tax bases of assets and liabilities and their financial reporting amounts that give rise to the deferred tax assets and deferred tax liabilities as of December 31, 2018 and 2017 are as follows: December 31, 2018 2017 Deferred tax assets: Accounts receivable $ 16 $ 14 Inventory 120 49 Accrued expenses 15 12 NOL carryforwards 10,899 1,330 Interest limitation imposed by the TJCA 2,124 — Stock Compensation 1,224 — Other 260 319 Property and equipment 1,380 1,145 Orphan Drug and R&D Tax Credits 3,917 113 19,955 2,982 Deferred tax liabilities: Intangible assets (39 ) (45 ) Prepaid expenses (407 ) (148 ) (446 ) (193 Valuation Allowance (19,509 ) (2,789 ) Net deferred tax asset/(liability) $ — $ — |
Reconciliation of Income Tax Benefit | A reconciliation of income tax benefit and the amount computed by applying the statutory federal income tax rates of 21% and 34% to loss before taxes for the years ended December 31, 2018 and 2017, respectively, as follows: Year Ended December 31, 2018 2017 Income taxes at statutory rate 21.00 % 34.00 % Increase (decrease) resulting from: State income tax 7.04 4.06 Permanent differences (7.09 ) (8.90 ) Research & development credit 4.40 1.72 Return to provision 1.48 — Effect of state rate change 0.41 — Valuation allowance (27.24 ) (13.54 ) Effect of the deferred rate change — (17.34 ) Effective tax rate 0.00 % 0.00 % |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Commitments and Contingencies [Abstract] | |
Future Minimum Lease Payments Under Operating Leases | The following schedule presents future minimum lease payments under operating leases as of December 31, 2018, including those derived from renewal options that are deemed noncancelable under FASB ASC Section 840-10-35, Leases - Subsequent Measurement Amount 2019 $ 1,233 2020 881 2021 815 2022 681 2023 65 Thereafter 0 Total $ 3,675 |
Quarterly Financial Data (una_2
Quarterly Financial Data (unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2018 | |
Quarterly Financial Data (unaudited) [Abstract] | |
Selected Quarterly Financial Information | The following tables contain selected quarterly financial information from 2018 and 2017 (in thousands, except per share amounts). The Company believes that this information reflects all normal recurring adjustments necessary for a fair statement of the information for the periods presented. The operating results for any quarter are not necessarily indicative of results for any future period. Three Months Ended March 31, 2018 June 30, 2018 September 30, 2018 December 31, 2018 Revenues $ 23,411 $ 13,928 $ 13,267 $ 16,824 Manufacture and supply 5,636 4,973 5,592 4,787 Total costs and expenses 18,106 46,614 22,471 29,173 Net income (loss) 4,099 (36,493) (15,038) (13,944) Basic and diluted net income (loss) per common share $ 0.27 $ (1.90) $ (0.64) $ (0.56) Three Months Ended March 31, 2017 June 30, 2017 September 30, 2017 December 31, 2017 Revenues $ 16,436 $ 11,142 $ 27,146 $ 12,194 Manufacture and supply 4,184 5,141 4,880 5,615 Total costs and expenses 15,655 15,201 16,725 19,450 Net income (loss) (1,457) (5,897) 8,451 (10,040) |
Corporate Organization and Co_3
Corporate Organization and Company Overview (Details) $ / shares in Units, $ in Thousands | Aug. 15, 2018USD ($)$ / sharesshares | Jul. 27, 2018USD ($)$ / sharesshares | Aug. 15, 2018USD ($)$ / sharesshares | Jul. 31, 2018$ / shares | Apr. 30, 2018$ / sharesshares | Dec. 31, 2018USD ($)$ / sharesshares | Dec. 31, 2017USD ($)shares | Jun. 30, 2018shares | Mar. 31, 2018shares |
Number of Redeemable and Non-redeemable Interests Outstanding [Abstract] | |||||||||
Number of redeemable and non-redeemable interests outstanding (in shares) | 246,768,153 | ||||||||
Corporate Conversion, Reorganization, Stock Splits and IPO [Abstract] | |||||||||
Common stock, shares issued (in shares) | 24,957,309 | ||||||||
Conversion ratio, stock | 12.34 | 1 | |||||||
Common stock, shares authorized (in shares) | 250,000,000 | 350,000,000 | 250,000,000 | 25,000 | |||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.001 | $ 0.001 | |||||||
Initial Public Offering of Common Stock and Authorized Number of Capital Stock [Abstract] | |||||||||
Share price (in dollars per share) | $ / shares | $ 15 | ||||||||
Net proceeds from initial public offering | $ | $ 63,482 | $ 68,714 | $ 0 | ||||||
Common stock, shares outstanding (in shares) | 24,957,309 | ||||||||
Initial Public Offering [Member] | |||||||||
Initial Public Offering of Common Stock and Authorized Number of Capital Stock [Abstract] | |||||||||
Number of common shares issued (in shares) | 4,500,000 | ||||||||
Share price (in dollars per share) | $ / shares | $ 15 | ||||||||
Net proceeds from initial public offering | $ | $ 57,543 | ||||||||
Payments for deferred offering costs | $ | $ 9,957 | ||||||||
Over-Allotment Option [Member] | |||||||||
Initial Public Offering of Common Stock and Authorized Number of Capital Stock [Abstract] | |||||||||
Number of common shares issued (in shares) | 425,727 | 425,727 | |||||||
Share price (in dollars per share) | $ / shares | $ 15 | $ 15 | |||||||
Net proceeds from initial public offering | $ | $ 5,939 | ||||||||
Payments for deferred offering costs | $ | $ 447 | ||||||||
Redeemable Preferred A-3 Interests [Member] | |||||||||
Number of Redeemable and Non-redeemable Interests Outstanding [Abstract] | |||||||||
Number of redeemable and non-redeemable interests outstanding (in shares) | 5,055,000 | ||||||||
Redeemable Preferred A-2 Interests [Member] | |||||||||
Number of Redeemable and Non-redeemable Interests Outstanding [Abstract] | |||||||||
Number of redeemable and non-redeemable interests outstanding (in shares) | 82,071,200 | ||||||||
Nonredeemable A-1 Interests [Member] | |||||||||
Number of Redeemable and Non-redeemable Interests Outstanding [Abstract] | |||||||||
Number of redeemable and non-redeemable interests outstanding (in shares) | 21,526,850 | ||||||||
Nonredeemable A Interests [Member] | |||||||||
Number of Redeemable and Non-redeemable Interests Outstanding [Abstract] | |||||||||
Number of redeemable and non-redeemable interests outstanding (in shares) | 16,886,750 | ||||||||
Common Interests [Member] | |||||||||
Number of Redeemable and Non-redeemable Interests Outstanding [Abstract] | |||||||||
Number of redeemable and non-redeemable interests outstanding (in shares) | 121,228,353 | ||||||||
Corporate Conversion, Reorganization, Stock Splits and IPO [Abstract] | |||||||||
Effect of Stock Split (in shares) | 0 | ||||||||
Initial Public Offering of Common Stock and Authorized Number of Capital Stock [Abstract] | |||||||||
Number of common shares issued (in shares) | 0 | ||||||||
Voting Common Stock [Member] | |||||||||
Corporate Conversion, Reorganization, Stock Splits and IPO [Abstract] | |||||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.001 | ||||||||
Effect of Stock Split (in shares) | 37,212 | ||||||||
Nonvoting Common Stock [Member] | |||||||||
Initial Public Offering of Common Stock and Authorized Number of Capital Stock [Abstract] | |||||||||
Number of common shares issued (in shares) | 4,922,353 | ||||||||
Common stock, shares outstanding (in shares) | 4,922,353 | 4,922,353 | |||||||
Aquestive Partners, LLC [Member] | Voting Common Stock [Member] | |||||||||
Corporate Conversion, Reorganization, Stock Splits and IPO [Abstract] | |||||||||
Common stock, shares issued (in shares) | 5,000 | ||||||||
Common Stock [Member] | |||||||||
Corporate Conversion, Reorganization, Stock Splits and IPO [Abstract] | |||||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.001 | ||||||||
Effect of Stock Split (in shares) | 15,072,647 | ||||||||
Initial Public Offering of Common Stock and Authorized Number of Capital Stock [Abstract] | |||||||||
Number of common shares issued (in shares) | 4,925,727 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies, Cash and Cash Equivalents (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Cash and Cash Equivalents [Abstract] | ||
Cash equivalents | $ 0 | $ 0 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies, Trade Accounts Receivable (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Trade Accounts Receivable [Abstract] | |||
Trade receivables, period for credit term | 105 days | ||
Allowance for doubtful accounts associated with accounts receivable | $ 58 | $ 55 | $ 108 |
Minimum [Member] | |||
Trade Accounts Receivable [Abstract] | |||
Trade receivables, period for credit term | 30 days | ||
Maximum [Member] | |||
Trade Accounts Receivable [Abstract] | |||
Trade receivables, period for credit term | 60 days |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies, Revenue Recognition (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Revenue Recognition [Abstract] | ||
Period of research and development projects | 3 years | |
Estimated allowances on product sales | $ (591) | $ 0 |
Accounts Receivable [Member] | ||
Revenue Recognition [Abstract] | ||
Estimated allowances on product sales | (104) | 0 |
Accrued Expenses [Member] | ||
Revenue Recognition [Abstract] | ||
Estimated allowances on product sales | $ (487) | $ 0 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies, Share-Based Compensation (Details) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2018USD ($)shares | Dec. 31, 2017USD ($) | Jun. 30, 2018shares | ||
Share-based Compensation expenses [Abstract] | ||||
Share-based compensation | $ 29,940 | $ 0 | ||
Common stock, shares outstanding (in shares) | shares | 24,957,309 | |||
Discount for Lack of Marketability [Member] | ||||
Share-based Compensation expenses [Abstract] | ||||
Valuation assumptions | 0.34 | |||
Volatility [Member] | ||||
Share-based Compensation expenses [Abstract] | ||||
Valuation assumptions | 0.9 | |||
Weighted Average Cost of Capital [Member] | ||||
Share-based Compensation expenses [Abstract] | ||||
Valuation assumptions | 0.275 | |||
Nonvoting Common Stock [Member] | ||||
Share-based Compensation expenses [Abstract] | ||||
Share-based compensation | [1] | $ 27,298 | ||
Fair market value of non-voting shares at shares granted date | 19,123 | |||
Withholding taxes on share-based compensation | $ 8,175 | |||
Number of common shares issued (in shares) | shares | 4,922,353 | |||
Common stock, shares outstanding (in shares) | shares | 4,922,353 | 4,922,353 | ||
[1] | Non-Voting Common Share Issuance |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies, Fair Value Measurements (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Level 2 [Member] | ||
Fair Value of Financial Instruments [Abstract] | ||
Assets, fair value | $ 0 | |
Liabilities, fair value | 0 | |
Level 3 [Member] | ||
Fair Value of Financial Instruments [Abstract] | ||
Assets, fair value | 0 | |
Liabilities, fair value | $ 0 | |
Warrant liability, fair value | $ 7,673 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies, Deferred Offering Costs and Recent Accounting Pronouncements (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Deferred Offering Costs [Abstract] | ||
Deferred offering costs | $ 5,232 | $ 1,050 |
Recent Accounting Pronouncements [Abstract] | ||
Accumulated deficit | (61,376) | $ (120,093) |
Difference between Revenue Guidance in Effect before and after Topic 606 [Member] | Accounting Standards Update 2014-09 [Member] | ||
Recent Accounting Pronouncements [Abstract] | ||
Accumulated deficit | $ 3,700 |
Risks and Uncertainties (Detail
Risks and Uncertainties (Details) - USD ($) $ / shares in Units, $ in Thousands | Aug. 15, 2018 | Jul. 27, 2018 | Aug. 15, 2018 | Dec. 31, 2018 | Dec. 31, 2017 |
Risks and Uncertainties [Abstract] | |||||
Working capital | $ 41,249 | ||||
Initial public offering [Abstract] | |||||
Share price (in dollars per share) | $ 15 | ||||
Net cash proceeds from initial public offering | $ 63,482 | $ 68,714 | $ 0 | ||
Initial Public Offering [Member] | |||||
Initial public offering [Abstract] | |||||
Number of common shares issued (in shares) | 4,500,000 | ||||
Share price (in dollars per share) | $ 15 | ||||
Net cash proceeds from initial public offering | $ 57,543 | ||||
Over-Allotment Option [Member] | |||||
Initial public offering [Abstract] | |||||
Number of common shares issued (in shares) | 425,727 | 425,727 | |||
Share price (in dollars per share) | $ 15 | $ 15 | |||
Net cash proceeds from initial public offering | $ 5,939 |
Revenues and Trade Receivable_3
Revenues and Trade Receivables, Net, Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | |
Revenue [Abstract] | ||||||||||
Revenues | $ 16,824 | $ 13,267 | $ 13,928 | $ 23,411 | $ 12,194 | $ 27,146 | $ 11,142 | $ 16,436 | $ 67,430 | $ 66,918 |
Manufacture and Supply Revenue [Member] | ||||||||||
Revenue [Abstract] | ||||||||||
Revenues | 37,319 | 40,092 | ||||||||
License and Royalty Revenue [Member] | ||||||||||
Revenue [Abstract] | ||||||||||
Revenues | 24,699 | 23,133 | ||||||||
Co-Development and Research Fees [Member] | ||||||||||
Revenue [Abstract] | ||||||||||
Revenues | 5,184 | 3,693 | ||||||||
Proprietary Product Sales, Net [Member] | ||||||||||
Revenue [Abstract] | ||||||||||
Revenues | $ 228 | $ 0 |
Revenues and Trade Receivable_4
Revenues and Trade Receivables, Net, Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | |
Revenues by Geographic Market [Abstract] | ||||||||||
Revenues | $ 16,824 | $ 13,267 | $ 13,928 | $ 23,411 | $ 12,194 | $ 27,146 | $ 11,142 | $ 16,436 | $ 67,430 | $ 66,918 |
United States [Member] | ||||||||||
Revenues by Geographic Market [Abstract] | ||||||||||
Revenues | 64,565 | 63,710 | ||||||||
Ex-United States [Member] | ||||||||||
Revenues by Geographic Market [Abstract] | ||||||||||
Revenues | $ 2,865 | $ 3,208 |
Revenues and Trade Receivable_5
Revenues and Trade Receivables, Net, Accounts Receivable, Net (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 |
Accounts Receivable, Net [Abstract] | |||
Accounts receivable | $ 6,610 | $ 6,156 | |
Other receivables | 33 | 78 | |
Less: allowance for bad debt | (58) | (55) | $ (108) |
Less: sales-related allowances | (104) | 0 | $ 0 |
Trade and other receivables, net | $ 6,481 | $ 6,179 |
Revenues and Trade Receivable_6
Revenues and Trade Receivables, Net, Changes in Allowance for Bad Debts Account (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Allowance for Doubtful Accounts Receivable [Roll Forward] | ||
Allowance for doubtful accounts at beginning of year | $ 55 | $ 108 |
Additions charged to bad debt expense | 53 | 0 |
Write-downs charged against the allowance | (50) | 0 |
Recoveries of amounts previously reserved | 0 | (53) |
Allowance for doubtful accounts at end of year | $ 58 | $ 55 |
Revenues and Trade Receivable_7
Revenues and Trade Receivables, Net, Accounts Receivable Allowances (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Revenues and Trade Receivables, Net [Roll Forward] | ||
Beginning balance | $ 0 | $ 0 |
Provision related to sales in 2018 | 104 | 0 |
Credits and payments | 0 | 0 |
Ending balance | $ 104 | $ 0 |
Revenues and Trade Receivable_8
Revenues and Trade Receivables, Net, Concentration of Major Customers (Details) - Indivior [Member] | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Revenue [Member] | ||
Customer Concentration [Abstract] | ||
Concentrations of risk | 89.00% | 88.00% |
Receivables [Member] | ||
Customer Concentration [Abstract] | ||
Concentrations of risk | 78.00% | 93.00% |
Material Agreements (Details)
Material Agreements (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | 180 Months Ended | 182 Months Ended | ||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2018 | Feb. 20, 2019 | |
Agreements [Abstract] | ||||||||||||
Revenues | $ 16,824 | $ 13,267 | $ 13,928 | $ 23,411 | $ 12,194 | $ 27,146 | $ 11,142 | $ 16,436 | $ 67,430 | $ 66,918 | ||
Commercial Exploitation Agreement with Indivior [Member] | ||||||||||||
Agreements [Abstract] | ||||||||||||
License agreement term | 7 years | |||||||||||
Automatic renewal period of agreement | 1 year | |||||||||||
Commercial Exploitation Agreement with Indivior [Member] | Minimum [Member] | ||||||||||||
Agreements [Abstract] | ||||||||||||
Notice period of intent not to renew agreement | 1 year | |||||||||||
Supplemental Agreement with Indivior [Member] | ||||||||||||
Agreements [Abstract] | ||||||||||||
Revenues | $ 40,750 | |||||||||||
Contingent payments receivable in the future | 34,250 | $ 34,250 | $ 34,250 | |||||||||
Supplemental Agreement with Indivior [Member] | Maximum [Member] | ||||||||||||
Agreements [Abstract] | ||||||||||||
Contingent payments receivable in the future | 75,000 | 75,000 | 75,000 | |||||||||
Supplemental Agreement with Indivior Performance or Event-Based Milestones [Member] | ||||||||||||
Agreements [Abstract] | ||||||||||||
Contingent payments receivable in the future | 33,000 | 33,000 | 33,000 | |||||||||
Supplemental Agreement with Indivior Additional Process Patent Rights to the Company [Member] | ||||||||||||
Agreements [Abstract] | ||||||||||||
Contingent payments receivable in the future | 1,250 | 1,250 | 1,250 | |||||||||
License Agreement with Sunovion Pharmaceuticals, Inc. [Member] | ||||||||||||
Agreements [Abstract] | ||||||||||||
Revenues | 18,000 | |||||||||||
License Agreement with Sunovion Pharmaceuticals, Inc Milestones [Member] | ||||||||||||
Agreements [Abstract] | ||||||||||||
Revenues | 13,000 | |||||||||||
License Agreement with Sunovion Pharmaceuticals, Inc Milestones [Member] | Maximum [Member] | ||||||||||||
Agreements [Abstract] | ||||||||||||
Contingent payments receivable in the future | $ 45,000 | 45,000 | 45,000 | |||||||||
License Agreement with Sunovion Pharmaceuticals, Inc. Upfront [Member] | ||||||||||||
Agreements [Abstract] | ||||||||||||
Revenues | $ 5,000 | |||||||||||
Agreement to Terminate CLA with KemPharm [Member] | ||||||||||||
Agreements [Abstract] | ||||||||||||
Revenues | $ 0 | $ 0 |
Inventory (Details)
Inventory (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Inventory [Abstract] | ||
Raw material | $ 1,283 | $ 725 |
Packaging material | 2,975 | 2,225 |
Finished goods | 1,183 | 1,064 |
Total inventory | $ 5,441 | $ 4,014 |
Property and Equipment, net (De
Property and Equipment, net (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2018 | Dec. 31, 2017 | ||
Property and Equipment, Net [Abstract] | |||
Property and equipment, gross | $ 47,398 | $ 45,465 | |
Less: accumulated depreciation and amortization | (35,191) | (32,005) | |
Total property and equipment, net | 12,207 | 13,460 | |
Depreciation and amortization | 3,186 | 3,750 | |
Machinery [Member] | |||
Property and Equipment, Net [Abstract] | |||
Property and equipment, gross | $ 20,681 | 20,056 | |
Machinery [Member] | Minimum [Member] | |||
Property and Equipment, Net [Abstract] | |||
Useful lives | 3 years | ||
Machinery [Member] | Maximum [Member] | |||
Property and Equipment, Net [Abstract] | |||
Useful lives | 15 years | ||
Furniture and Fixtures [Member] | |||
Property and Equipment, Net [Abstract] | |||
Property and equipment, gross | $ 1,150 | 1,109 | |
Furniture and Fixtures [Member] | Minimum [Member] | |||
Property and Equipment, Net [Abstract] | |||
Useful lives | 3 years | ||
Furniture and Fixtures [Member] | Maximum [Member] | |||
Property and Equipment, Net [Abstract] | |||
Useful lives | 15 years | ||
Leasehold Improvements [Member] | |||
Property and Equipment, Net [Abstract] | |||
Property and equipment, gross | [1] | $ 21,333 | 21,271 |
Computer, Network Equipment and Software [Member] | |||
Property and Equipment, Net [Abstract] | |||
Property and equipment, gross | $ 2,579 | 2,108 | |
Computer, Network Equipment and Software [Member] | Minimum [Member] | |||
Property and Equipment, Net [Abstract] | |||
Useful lives | 3 years | ||
Computer, Network Equipment and Software [Member] | Maximum [Member] | |||
Property and Equipment, Net [Abstract] | |||
Useful lives | 7 years | ||
Construction in Progress [Member] | |||
Property and Equipment, Net [Abstract] | |||
Property and equipment, gross | $ 1,655 | $ 921 | |
[1] | Leasehold improvements are amortized over the shorter of the lease term or their estimated useful lives. |
Intangible Assets (Details)
Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Identifiable Intangible Assets [Abstract] | ||
Intangible assets, gross | $ 2,867 | $ 2,867 |
Less: accumulated amortization | (2,663) | (2,613) |
Intangible assets, net | 204 | 254 |
Amortization expense | 50 | 51 |
Estimated Annual Amortization Expense [Abstract] | ||
2019 | 50 | |
2020 | 50 | |
2021 | 50 | |
2022 | 50 | |
Purchase Technology-based Intangible [Member] | ||
Identifiable Intangible Assets [Abstract] | ||
Intangible assets, gross | 2,358 | 2,358 |
Purchased Patent [Member] | ||
Identifiable Intangible Assets [Abstract] | ||
Intangible assets, gross | $ 509 | $ 509 |
Accrued Expenses (Details)
Accrued Expenses (Details) - USD ($) $ in Thousands | Dec. 31, 2018 | Dec. 31, 2017 |
Accrued Expenses [Abstract] | ||
Accrued Compensation | $ 3,604 | $ 3,805 |
Accrued withholding tax for share-based compensation | 2,515 | 0 |
Real estate and personal property taxes | 388 | 372 |
Accrued distribution expenses | 481 | 0 |
Other | 207 | 225 |
Total accrued expenses | $ 7,195 | $ 4,402 |
Loans Payable (Details)
Loans Payable (Details) $ in Thousands | 1 Months Ended | 12 Months Ended | |
Mar. 31, 2017USD ($) | Dec. 31, 2018USD ($)Payment | Dec. 31, 2017USD ($) | |
Line of Credit Facility [Abstract] | |||
Loans payable, current | $ 4,600 | $ 0 | |
Amortization expense, deferred debt issuance costs and debt discounts | 1,696 | 1,860 | |
Unamortized deferred debt issuance cost and deferred debt discounts | 2,797 | 4,493 | |
Perceptive Credit Opportunities Fund, LP [Member] | Line of Credit [Member] | |||
Line of Credit Facility [Abstract] | |||
Borrowing amount | 45,000 | ||
Additional borrowing capacity | 5,000 | ||
Drew down amount | $ 5,000 | ||
Credit facility, maximum borrowing capacity | $ 50,000 | ||
Debt maturity date | Dec. 16, 2020 | ||
Debt instrument base rate | 2.00% | ||
Debt instrument variable interest rate | 9.75% | ||
Loans payable, current | $ 4,600 | ||
Financial covenant requirement, Consecutive period for maintaining minimum revenues | 12 months | ||
Warrant to purchase senior common equity interest ratio to fully diluted common units | 4.50% | ||
Perceptive Credit Opportunities Fund, LP [Member] | Line of Credit [Member] | Minimum [Member] | |||
Line of Credit Facility [Abstract] | |||
Debt instrument effective interest rate | 11.75% | ||
Financial covenant requirement, monthly cash balance | $ 4,000 | ||
Perceptive Credit Opportunities Fund, LP [Member] | Line of Credit [Member] | May 2019 [Member] | |||
Line of Credit Facility [Abstract] | |||
Frequency of periodic principal payment | Monthly | ||
Number of loan principal payments | Payment | 7 | ||
Monthly principal payment amount | $ 550 | ||
Perceptive Credit Opportunities Fund, LP [Member] | Line of Credit [Member] | August 2019 [Member] | |||
Line of Credit Facility [Abstract] | |||
Frequency of periodic principal payment | Monthly | ||
Monthly principal payment amount | $ 750 | ||
Perceptive Credit Opportunities Fund, LP [Member] | Line of Credit [Member] | LIBOR [Member] | |||
Line of Credit Facility [Abstract] | |||
Term of variable rate | 1 month | ||
White Oaks Global Advisors, LLC [Member] | Line of Credit [Member] | |||
Line of Credit Facility [Abstract] | |||
Payment of existing debt obligation | $ 37,500 |
Warrants (Details)
Warrants (Details) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2018USD ($)$ / sharesshares | Dec. 31, 2017USD ($) | |
Warrants [Abstract] | ||
Cash received for warrant exercise | $ 116 | $ 24 |
Initial price of common stock offered (in dollars per share) | $ / shares | $ 15 | |
Warrant Liability [Roll Forward] | ||
Balance as of beginning of period | $ 7,673 | 6,550 |
Change in fair value recognized | 5,278 | 1,123 |
Exercise of warrants | (12,951) | |
Balance as of end of period | $ 0 | $ 7,673 |
Discount Rate [Member] | ||
Warrants [Abstract] | ||
Measurement input of warrants | 0.265 | |
Volatility Rate [Member] | ||
Warrants [Abstract] | ||
Measurement input of warrants | 0.9 | |
Perceptive Credit Opportunities Fund, LP [Member] | ||
Warrants [Abstract] | ||
Number of shares received upon automatic exercise of warrant (in shares) | shares | 863,400 | |
Cash received for warrant exercise | $ 116 | |
Perceptive Credit Opportunities Fund, LP [Member] | Line of Credit [Member] | ||
Warrants [Abstract] | ||
Warrant to purchase senior common equity interest ratio to fully diluted common units | 4.50% | |
Purchase price of warrant within first year of the loan | $ 3,000 | |
Purchase price of warrant after first year | 5,000 | |
Warrant liability, fair value | $ 5,800 |
Asset Retirement Obligation (De
Asset Retirement Obligation (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Asset Retirement Obligation [Abstract] | ||
Depreciation expense related to ARO | $ 27 | $ 25 |
Asset Retirement Obligation [Roll Forward] | ||
Balance at beginning of period | 1,081 | 959 |
Additions | 5 | 0 |
Accretion | 130 | 122 |
Balance at ending of period | $ 1,216 | $ 1,081 |
Net Loss Per Share (Details)
Net Loss Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | |
Numerator [Abstract] | ||||||||||
Net loss | $ (13,944) | $ (15,038) | $ (36,493) | $ 4,099 | $ (10,040) | $ 8,451 | $ (5,897) | $ (1,457) | $ (61,376) | $ (8,943) |
Denominator [Abstract] | ||||||||||
Weighted-average number of common shares - basic and diluted (in shares) | 20,725,526 | |||||||||
Loss per common share - basic and diluted (in dollars per share) | $ (0.56) | $ (0.64) | $ (1.90) | $ 0.27 | $ (2.96) | |||||
Stock Options [Member] | ||||||||||
Dilutive Instruments [Abstract] | ||||||||||
Anti-dilutive securities excluded from computation of diluted weighted average shares outstanding (in shares) | 1,033,492 | |||||||||
Unvested Restricted Stock Units [Member] | ||||||||||
Dilutive Instruments [Abstract] | ||||||||||
Anti-dilutive securities excluded from computation of diluted weighted average shares outstanding (in shares) | 205,175 |
Share-Based Compensation (Detai
Share-Based Compensation (Details) $ / shares in Units, $ in Thousands | 7 Months Ended | 12 Months Ended | ||||
Dec. 31, 2018USD ($)$ / sharesshares | Dec. 31, 2018USD ($)PlanPeriod$ / sharesshares | Dec. 31, 2017USD ($) | Jun. 30, 2018shares | |||
Share-based Compensation expenses [Abstract] | ||||||
Share-based compensation | $ | $ 29,940 | $ 0 | ||||
Performance Unit and Option Awards [Abstract] | ||||||
Common stock, shares outstanding (in shares) | shares | 24,957,309 | 24,957,309 | ||||
Valuation Assumptions for Determination of Fair Value [Abstract] | ||||||
Shares available for grant (in shares) | shares | 2,900,000 | 2,900,000 | ||||
Additional Disclosures [Abstract] | ||||||
Share price (in dollars per share) | $ 15 | $ 15 | ||||
Manufacturing and Supply [Member] | ||||||
Share-based Compensation expenses [Abstract] | ||||||
Share-based compensation | $ | $ 414 | |||||
Research and Development [Member] | ||||||
Share-based Compensation expenses [Abstract] | ||||||
Share-based compensation | $ | 2,583 | |||||
Selling, General and Administrative [Member] | ||||||
Share-based Compensation expenses [Abstract] | ||||||
Share-based compensation | $ | $ 26,943 | |||||
Discount for Lack of Marketability [Member] | ||||||
Valuation Assumptions for Determination of Fair Value [Abstract] | ||||||
Valuation assumptions | 0.34 | 0.34 | ||||
Volatility [Member] | ||||||
Valuation Assumptions for Determination of Fair Value [Abstract] | ||||||
Valuation assumptions | 0.9 | 0.9 | ||||
Weighted Average Cost of Capital [Member] | ||||||
Valuation Assumptions for Determination of Fair Value [Abstract] | ||||||
Valuation assumptions | 0.275 | 0.275 | ||||
Nonvoting Common Stock [Member] | ||||||
Share-based Compensation expenses [Abstract] | ||||||
Share-based compensation | $ | [1] | $ 27,298 | ||||
Performance Unit and Option Awards [Abstract] | ||||||
Common stock, shares outstanding (in shares) | shares | 4,922,353 | 4,922,353 | 4,922,353 | |||
Fair market value of non-voting shares at shares granted date | $ | $ 19,123 | |||||
Withholding taxes on share-based compensation | $ | $ 8,175 | |||||
Number of common shares issued (in shares) | shares | 4,922,353 | |||||
Performance Units [Member] | ||||||
Performance Unit and Option Awards [Abstract] | ||||||
Number of performance units plans | Plan | 2 | |||||
Restricted Stock Units [Member] | ||||||
Share-based Compensation expenses [Abstract] | ||||||
Share-based compensation | $ | $ 1,085 | $ 1,085 | [2] | |||
Performance Unit and Option Awards [Abstract] | ||||||
Service period | 2 years | |||||
Number of Units [Roll Forward] | ||||||
Unvested at Plan adoption (in shares) | shares | 0 | |||||
Granted (in shares) | shares | 265,000 | |||||
Vested (in shares) | shares | (60,000) | |||||
Unvested, at end of period (in shares) | shares | 205,000 | 205,000 | ||||
Weighted Average Grant Date Fair Value Per Share [Abstract] | ||||||
Unvested at Plan adoption (in dollars per share) | $ 0 | |||||
Granted (in dollars per share) | 14.83 | |||||
Vested (in dollars per share) | 15.03 | |||||
Unvested, Balance at end of period (in dollars per share) | $ 14.77 | $ 14.77 | ||||
Additional Disclosures [Abstract] | ||||||
Grant date fair value | $ | $ 896 | $ 896 | ||||
Compensation Cost Not yet Recognized [Abstract] | ||||||
Unrecognized stock-based compensation expense | $ | $ 2,568 | $ 2,568 | ||||
Unrecognized compensation cost, recognition period | 3 years | |||||
Weighted average grant date fair value (in dollars per share) | $ 14.83 | |||||
Restricted Stock Units [Member] | Senior Management and Board [Member] | ||||||
Additional Disclosures [Abstract] | ||||||
Vesting period | 2 years | |||||
Restricted Stock Units [Member] | key Employees [Member] | ||||||
Additional Disclosures [Abstract] | ||||||
Vesting period | 3 years | |||||
Stock Options [Member] | ||||||
Share-based Compensation expenses [Abstract] | ||||||
Share-based compensation | $ | [2] | $ 1,557 | ||||
Performance Unit and Option Awards [Abstract] | ||||||
Service period | 3 years | |||||
Weighted Average Grant Date Fair Value Per Share [Abstract] | ||||||
Granted (in dollars per share) | $ 10.83 | |||||
Number of Options [Roll Forward] | ||||||
Outstanding at beginning of period (in shares) | shares | 0 | |||||
Granted (in shares) | shares | 1,033,000 | |||||
Exercised, Forfeited, Expired (in shares) | shares | 0 | |||||
Outstanding at end of period (in shares) | shares | 1,033,000 | 1,033,000 | ||||
Vested or expected to vest at end of period (in shares) | shares | 962,000 | 962,000 | ||||
Exercisable at end of period (in shares) | shares | 87,000 | 87,000 | ||||
Weighted Average Exercise Price [Abstract] | ||||||
Granted (in dollars per share) | $ 14.72 | |||||
Outstanding at end of period (In dollars per share) | 14.72 | $ 14.72 | ||||
Vested or expected to vest at end of period (in dollars per share) | 14.72 | 14.72 | ||||
Exercisable at end of period (in dollars per share) | $ 15.02 | $ 15.02 | ||||
Weighted Average Remaining Contractual Term in Years [Abstract] | ||||||
Granted | 9 years 6 months 18 days | |||||
Outstanding at end of period | 9 years 6 months 18 days | |||||
Vested or expected to vest at end of period | 9 years 6 months 18 days | |||||
Exercisable at end of period | 9 years 6 months 22 days | |||||
Aggregate Intrinsic Value [Abstract] | ||||||
Granted | $ | $ 0 | |||||
Outstanding at end of period | $ | 0 | $ 0 | ||||
Vested or expected to vest at end of period | $ | 0 | 0 | ||||
Exercisable at end of period | $ | $ 0 | $ 0 | ||||
Additional Disclosures [Abstract] | ||||||
Stock options grant, exercise price (in dollars per share) | $ 14.72 | |||||
Term of award | 10 years | |||||
Share price (in dollars per share) | $ 6.30 | $ 6.30 | ||||
Number of vesting periods | Period | 2 | |||||
Fair Value Assumptions [Abstract] | ||||||
Expected dividend yield | 0.00% | |||||
Expected volatility | 90.00% | |||||
Compensation Cost Not yet Recognized [Abstract] | ||||||
Unrecognized stock-based compensation expense | $ | $ 8,845 | $ 8,845 | ||||
Unrecognized compensation cost, recognition period | 2 years 7 months 6 days | |||||
Weighted average grant date fair value (in dollars per share) | $ 10.83 | |||||
Stock Options [Member] | Minimum [Member] | ||||||
Weighted Average Exercise Price [Abstract] | ||||||
Granted (in dollars per share) | 6.54 | |||||
Additional Disclosures [Abstract] | ||||||
Stock options grant, exercise price (in dollars per share) | $ 6.54 | |||||
Fair Value Assumptions [Abstract] | ||||||
Expected term (years) | 5 years 9 months 18 days | |||||
Risk-free rate | 2.80% | |||||
Stock Options [Member] | Maximum [Member] | ||||||
Weighted Average Exercise Price [Abstract] | ||||||
Granted (in dollars per share) | $ 18.67 | |||||
Additional Disclosures [Abstract] | ||||||
Stock options grant, exercise price (in dollars per share) | $ 18.67 | |||||
Fair Value Assumptions [Abstract] | ||||||
Expected term (years) | 6 years 1 month 6 days | |||||
Risk-free rate | 2.90% | |||||
Stock Options [Member] | Senior Management and Board [Member] | ||||||
Additional Disclosures [Abstract] | ||||||
Vesting period | 3 years | |||||
Stock Options [Member] | key Employees [Member] | ||||||
Additional Disclosures [Abstract] | ||||||
Vesting period | 3 years | |||||
Employee Stock Purchase Plan [Member] | ||||||
Employee Stock Purchase Plan [Abstract] | ||||||
Number of shares reserved for issuance (in shares) | shares | 250,000 | |||||
Purchase price of common stock as percentage of fair market value | 85.00% | |||||
[1] | Non-Voting Common Share Issuance | |||||
[2] | Share-Based Compensation Equity Awards |
Employee Benefit Plans (Details
Employee Benefit Plans (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Employee Benefit Plans [Abstract] | ||
Contributions by the employer | $ 837 | $ 616 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Unrecognized Tax Benefits [Abstract] | ||
Unrecognized tax benefits | $ 0 | $ 0 |
Unrecognized Tax Benefits, Income Tax Penalties and Interest Accrued [Abstract] | ||
Penalties and interest accrued | 0 | 0 |
Deferred tax assets [Abstract] | ||
Accounts receivable | 16 | 14 |
Inventory | 120 | 49 |
Accrued expenses | 15 | 12 |
NOL carryforwards | 10,899 | 1,330 |
Interest limitation imposed by the TJCA | 2,124 | 0 |
Stock Compensation | 1,224 | 0 |
Other | 260 | 319 |
Property and equipment | 1,380 | 1,145 |
Orphan Drug and R&D Tax Credits | 3,917 | 113 |
Deferred tax assets | 19,955 | 2,982 |
Deferred tax liabilities [Abstract] | ||
Intangible assets | (39) | (45) |
Prepaid expenses | (407) | (148) |
Deferred tax liabilities | (446) | (193) |
Valuation Allowance | (19,509) | (2,789) |
Net deferred tax asset/(liability) | $ 0 | $ 0 |
Reconciliation of Income Tax Benefit [Abstract] | ||
Income taxes at statutory rate | 21.00% | 34.00% |
Increase (decrease) resulting from [Abstract] | ||
State income tax | 7.04% | 4.06% |
Permanent differences | (7.09%) | (8.90%) |
Research & development credit | 4.40% | 1.72% |
Return to provision | 1.48% | 0.00% |
Effect of state rate change | 0.41% | 0.00% |
Valuation allowance | (27.24%) | (13.54%) |
Effect of the deferred rate change | 0.00% | (17.34%) |
Effective tax rate | 0.00% | 0.00% |
Federal [Member] | ||
Deferred tax liabilities [Abstract] | ||
Operating loss carryforwards | $ 39,172 | $ 5,222 |
State [Member] | ||
Deferred tax liabilities [Abstract] | ||
Operating loss carryforwards | $ 37,989 | $ 4,678 |
Commitments and Contingencies_2
Commitments and Contingencies (Details) $ in Thousands | Dec. 27, 2016USD ($) | Aug. 31, 2013Company | Dec. 31, 2018USD ($)ft²LeaseCompanyCaseStates | Dec. 31, 2017USD ($) |
Leases [Abstract] | ||||
Rent expense | $ 1,393 | $ 1,344 | ||
Operating Leases, Future Minimum Payments [Abstract] | ||||
2019 | 1,233 | |||
2020 | 881 | |||
2021 | 815 | |||
2022 | 681 | |||
2023 | 65 | |||
Thereafter | 0 | |||
Total | $ 3,675 | |||
Litigation and Contingencies [Abstract] | ||||
Number of companies patent infringement lawsuits filed | Company | 6 | |||
Number of cases resolved | Company | 3 | |||
Number of cases pending | Case | 2 | |||
Number of cases filed | Case | 3 | |||
Number of states in the antitrust litigation | States | 41 | |||
Damages claimed | $ 100,000 | |||
Ameriplex [Member] | ||||
Leases [Abstract] | ||||
Lease area | ft² | 73,000 | |||
Lease expiration date | Sep. 30, 2022 | |||
Melton [Member] | ||||
Leases [Abstract] | ||||
Lease area | ft² | 8,400 | |||
Lease expiration date | Mar. 31, 2023 | |||
Lease term | 5 years | |||
Warren [Member] | ||||
Leases [Abstract] | ||||
Lease expiration date | Feb. 28, 2020 | |||
Lease term | 18 months | |||
Number of two-year renewal options | Lease | 5 | |||
Renewal options period | 2 years |
Quarterly Financial Data (una_3
Quarterly Financial Data (unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||
Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | |
Quarterly Financial Data (unaudited) [Abstract] | ||||||||||
Revenues | $ 16,824 | $ 13,267 | $ 13,928 | $ 23,411 | $ 12,194 | $ 27,146 | $ 11,142 | $ 16,436 | $ 67,430 | $ 66,918 |
Manufacture and supply | 4,787 | 5,592 | 4,973 | 5,636 | 5,615 | 4,880 | 5,141 | 4,184 | 20,988 | 19,820 |
Total costs and expenses | 29,173 | 22,471 | 46,614 | 18,106 | 19,450 | 16,725 | 15,201 | 15,655 | 116,364 | 67,031 |
Net income (loss) | $ (13,944) | $ (15,038) | $ (36,493) | $ 4,099 | $ (10,040) | $ 8,451 | $ (5,897) | $ (1,457) | $ (61,376) | $ (8,943) |
Basic and diluted net income (loss) per common share (in dollars per share) | $ (0.56) | $ (0.64) | $ (1.90) | $ 0.27 | $ (2.96) |